Test Bank for Accounting for Managers Interpreting.pdf

Test Bank for Accounting for Managers I Multiple Choice Questions for Chapter 1 1 Accounting can best be defined as the: a) Financial representation of business activity b) Systematic recording and reporting of business transactions c) Analysis of financial information for users d) Systematic recording, reporting, and analysis of financial transactions Answer d 2 The term accountability can best be understood as the: a) Process of carrying out the accounting function b) Responsibility of the management of an organization to its stakeholders c) Ability to render accurate financial statements to management d) Processing of reliable financial information to shareholders Answer b 3 Stewardship is an important concept because of: a) The importance of the quality of decisions by small business owners b) The need to increase shareholder wealth c) The separation of ownership from management d) The need to recognise the importance of all stakeholders Answer c 4 Financial accounting in its present-day form can be most accurately traced back to: a) Mesopotamia in the 3rd century BC b) Northern Italy in the 14th and 15th centuries c) The Industrial Revolution in Britain in the 19th century d) The development of the assembly line in the early 20th century in the USA Answer b 5 Accounting is traditionally seen as fulfilling three functions: a) Scorekeeping, attention-directing and problem-solving b) Planning, decision-making and control c) Financial accounting, management accounting and corporate finance d) Income Statement, Balance Sheet and Statement of Cash Flows Answer a 6 The recording of financial transactions, aimed principally at reporting performance to shareholders is the main function of a) Bookkeeping b) Financial accounting c) Management Accounting d) Corporate finance Answer b