ACCT 315 EXAM 1(Complete solutions)
How does accounting help the capital allocation process attract investment capital? correct
answers By providing timely, relevant information.
Financial statements are the principal means through which a company communicates its
financial information to those outside it. correct answers True
General-purpose financial statements are the product of correct answers financial accounting.
Investors are interested in financial reporting because it provides information that is useful for
making decisions. correct answers True
The objective of financial reporting is to report the plans made by a company to improve the
productivity of its employees. correct answers False
An effective process of capital allocation promotes productivity and provides an efficient market
for buying and selling securities and obtaining and granting credit. correct answers True
What is the objective of financial reporting? correct answers Provide information about the
reporting entity that is useful to present and potential equity investors, lenders, and other
creditors.
Which of the following is not a major challenge facing the accounting profession? correct
answers Accounting for hard assets.
Financial accounting is the process of identifying, measuring, analyzing, and communicating
financial information needed by management to plan, evaluate, and control a company's
operations. correct answers False
Which of the following is a requirement for an accounting principle to be called "generally
accepted"? correct answers An authoritative accounting rule-making body has established it and
it has been accepted because of its universal application.
A general journal chronologically lists transactions and other events, expressed in terms of debits
and credits to accounts. correct answers True
One purpose of a trial balance is to prove that debits and credits are equal in the general ledger.
correct answers True
Which of the following is a real (permanent) account? correct answers Both Goodwill and
Accounts Receivable
If a company fails to post one of its journal entries to its general ledger, the trial balance will not
show an equal amount of debit and credit balance accounts. correct answers False
How does accounting help the capital allocation process attract investment capital? correct
answers By providing timely, relevant information.
Financial statements are the principal means through which a company communicates its
financial information to those outside it. correct answers True
General-purpose financial statements are the product of correct answers financial accounting.
Investors are interested in financial reporting because it provides information that is useful for
making decisions. correct answers True
The objective of financial reporting is to report the plans made by a company to improve the
productivity of its employees. correct answers False
An effective process of capital allocation promotes productivity and provides an efficient market
for buying and selling securities and obtaining and granting credit. correct answers True
What is the objective of financial reporting? correct answers Provide information about the
reporting entity that is useful to present and potential equity investors, lenders, and other
creditors.
Which of the following is not a major challenge facing the accounting profession? correct
answers Accounting for hard assets.
Financial accounting is the process of identifying, measuring, analyzing, and communicating
financial information needed by management to plan, evaluate, and control a company's
operations. correct answers False
Which of the following is a requirement for an accounting principle to be called "generally
accepted"? correct answers An authoritative accounting rule-making body has established it and
it has been accepted because of its universal application.
A general journal chronologically lists transactions and other events, expressed in terms of debits
and credits to accounts. correct answers True
One purpose of a trial balance is to prove that debits and credits are equal in the general ledger.
correct answers True
Which of the following is a real (permanent) account? correct answers Both Goodwill and
Accounts Receivable
If a company fails to post one of its journal entries to its general ledger, the trial balance will not
show an equal amount of debit and credit balance accounts. correct answers False
