Test Bank College Accounting: A Contemporary Approach 6th Edition by David Haddock – Complete Questions and Answers

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Test Bank College Accounting (A Contemporary Approach), 6th Edition by David
Haddock


Chap 01 6e Haddock Answers Included ✅
1) The purpose of accounting is to provide financial information about a business.
⊚ true
⊚ false



2) A firm’s financial affairs are summarized in periodic reports called general ledgers.
⊚ true
⊚ false



3) In a sole proprietorship, the owner is NOT responsible for the debts of the business if the
company is unable to pay.
⊚ true
⊚ false



4) Currently, generally accepted accounting principles are developed by the American Institute
of Certified Public Accountants (AICPA).
⊚ true
⊚ false



5) The Securities and Exchange Commission (SEC) requires that publicly owned corporations
submit financial statements to it at least one time each year.
⊚ true
⊚ false



6) Anyone can invest in a closely held corporation.
⊚ true
⊚ false



7) Managerial Accounting is any activity associated with the preparation of tax returns and the
audit of those returns.
⊚ true
⊚ false




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8) When developing GAAP, one step undertaken by the FASB includes holding public hearings
where interested parties can express their opinions.
⊚ true
⊚ false



9) Public accountants work on the staff of federal, state, or local governmental units.
⊚ true
⊚ false



10) The SEC uses financial information to determine a company's tax base.
⊚ true
⊚ false



11) When a partner leaves the company, the partnership is dissolved and a new partnership may
be formed with the remaining partners.
⊚ true
⊚ false



12) Accounting is used to communicate financial information and therefore is called the
“language of data”.
⊚ true
⊚ false



13) Some users of the financial information of a business are employed by the business while
others are independent, outside parties.
⊚ true
⊚ false



14) The certified bookkeeper designation indicates that an individual possesses the level of
knowledge and skills needed to carry out all key accounting functions through the adjusted
trial balance, including payroll.
⊚ true
⊚ false




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15) Accountants provide financial information to various parties so they can make business
decisions.
⊚ true
⊚ false



16) When a business is organized as a sole proprietorship, the owner should combine his/her
personal financial information with the business financial information.
⊚ true
⊚ false



17) Which of the following government agencies has the authority to suspend trading of a
company’s shares on stock exchanges?
A) Internal Revenue Service
B) Federal Trade Commission
C) Financial Accounting Standards Board
D) Securities and Exchange Commission



18) Which of the following is not one of the major types of services provided by public
accounting firms?
A) auditing
B) bookkeeping
C) tax accounting
D) management advisory services



19) Which of the following is not a requirement for becoming a Certified Bookkeeper?
A) pass a national exam
B) obtain a certain number of college credits in accounting courses
C) sign a code of ethics
D) submit evidence satisfying an experience requirement




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20) The separate entity assumption applies to which of the following corporate forms?
A) sole proprietorship
B) partnership
C) corporation
D) all of these answers are correct



21) A sole proprietorship has how many owners?
A) 1
B) 2
C) 3
D) 4



22) Accounting is often referred to as the language of:
A) business.
B) finance.
C) money.
D) data.



23) The results of the accounting process are summarized in periodic reports called:
A) cash budgets.
B) bank reconciliations.
C) financial statements.
D) worksheets.



24) Which of the following is not a goal of the internal controls implemented by owners and
managers?
A) to safeguard assets
B) to ensure reliability of accounting data
C) to promote compliance with management policies and applicable laws
D) to reduce expenses through the use of efficient processes




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