C213: Accounting Test with Accurate
Solutions
Which of the following is NOT a service typically provided by large public accounting
firms? - ANS-Making management decisions
The initials CPA stand for - ANS-certified public accountant
Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States? - ANS-Internal
Revenue Service
Which of the following organizations has specific legal authority to establish accounting
standards for publicly held companies? - ANS-Securities and Exchange Commission
(SEC)
Standards established by the International Accounting Standards Board are referred to
as - ANS-International Financial Reporting Standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices? - ANS-True
Which of the following is NOT a reason for the integration of worldwide accounting
standards? - ANS-the theoretical necessity of a common set of accounting standards
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance. - ANS-False
Sarbanes-Oxley Act - ANS-Increased federal oversight of the audit process resulted
from the passage of the following act of Congress -
A borrower benefits from providing financial information regarding income and expenses
in the form of a lower interest rate on the loan because of reduced uncertainty for the
lender with regard to repayment. - ANS-True
Which of the following is NOT one of the three primary financial statements? - ANS-The
Statement of Retained Earnings
One reason for a company's preparing and providing financial statements is to reduce
uncertainty for an investor regarding the firm's future financial performance. - ANS-True
, The idea that businesses must be accounted for as though they will exist at least for the
foreseeable future is the - ANS-Going concern concept
Economic resources that are owned or controlled by an enterprise are called - ANS-
Assets
The idea that the activities of the entity are to be separated from those of the individual
owner is the - ANS-Separate entity concept
Which of the following financial statements provides a picture of the enterprise at a
particular point in time? - ANS-Balance sheet
Which of the following accounts is considered to be the most liquid? - ANS-Cash
Which of the following is an overall measure of the performance of a business entity's
activities? - ANS-Net income (or net loss)
Expense and revenue accounts appear on the - ANS-income statement
Revenues cause - ANS-An increase in net assets
Expenses generally cause - ANS-A decrease in net assets
Which of the following would be included on an income statement? - ANS-Rent expense
A major source of cash from operating activities is - ANS-Receipts from sale of goods
Which of the following classifications does NOT appear on the Statement of Cash
Flows? - ANS-Borrowing
Which of the following classifications refers to those activities whereby cash is obtained
or repaid to owners and creditors? - ANS-Financing
Which of the following classifications refers to those activities associated with buying
and selling long-term assets? - ANS-Investing
Vital information that CANNOT be captured solely by dollar amounts is reported in a
firm's - ANS-Notes to financial statements
Which of the following is NOT one of the four general types of financial statement
notes? - ANS-Supplementary information required by the Internal Revenue Service
Which of the following is an example of a significant accounting policy that would be
explained in the notes to the financial statements? - ANS-The method used to estimate
depreciation on a piece of equipment
Solutions
Which of the following is NOT a service typically provided by large public accounting
firms? - ANS-Making management decisions
The initials CPA stand for - ANS-certified public accountant
Which of the following is the government agency that stipulates the rules and
regulations that govern the collection of taxes in the United States? - ANS-Internal
Revenue Service
Which of the following organizations has specific legal authority to establish accounting
standards for publicly held companies? - ANS-Securities and Exchange Commission
(SEC)
Standards established by the International Accounting Standards Board are referred to
as - ANS-International Financial Reporting Standards
The International Accounting Standards Board (IASB) is charged with developing
worldwide accounting practices? - ANS-True
Which of the following is NOT a reason for the integration of worldwide accounting
standards? - ANS-the theoretical necessity of a common set of accounting standards
With the current state of information technology, investors outside a company are now
allowed access to a company's internal database of financial information and do their
own customized analysis of a firm's performance. - ANS-False
Sarbanes-Oxley Act - ANS-Increased federal oversight of the audit process resulted
from the passage of the following act of Congress -
A borrower benefits from providing financial information regarding income and expenses
in the form of a lower interest rate on the loan because of reduced uncertainty for the
lender with regard to repayment. - ANS-True
Which of the following is NOT one of the three primary financial statements? - ANS-The
Statement of Retained Earnings
One reason for a company's preparing and providing financial statements is to reduce
uncertainty for an investor regarding the firm's future financial performance. - ANS-True
, The idea that businesses must be accounted for as though they will exist at least for the
foreseeable future is the - ANS-Going concern concept
Economic resources that are owned or controlled by an enterprise are called - ANS-
Assets
The idea that the activities of the entity are to be separated from those of the individual
owner is the - ANS-Separate entity concept
Which of the following financial statements provides a picture of the enterprise at a
particular point in time? - ANS-Balance sheet
Which of the following accounts is considered to be the most liquid? - ANS-Cash
Which of the following is an overall measure of the performance of a business entity's
activities? - ANS-Net income (or net loss)
Expense and revenue accounts appear on the - ANS-income statement
Revenues cause - ANS-An increase in net assets
Expenses generally cause - ANS-A decrease in net assets
Which of the following would be included on an income statement? - ANS-Rent expense
A major source of cash from operating activities is - ANS-Receipts from sale of goods
Which of the following classifications does NOT appear on the Statement of Cash
Flows? - ANS-Borrowing
Which of the following classifications refers to those activities whereby cash is obtained
or repaid to owners and creditors? - ANS-Financing
Which of the following classifications refers to those activities associated with buying
and selling long-term assets? - ANS-Investing
Vital information that CANNOT be captured solely by dollar amounts is reported in a
firm's - ANS-Notes to financial statements
Which of the following is NOT one of the four general types of financial statement
notes? - ANS-Supplementary information required by the Internal Revenue Service
Which of the following is an example of a significant accounting policy that would be
explained in the notes to the financial statements? - ANS-The method used to estimate
depreciation on a piece of equipment
