Test Bank Page 1
,Chapter 01: Accounting as Information
lk lk lk lk
1) Accounting communicates to stakeholders lk lk lk
A) minimally required public financial data. lk lk lk lk
B) the financial outcomes of operating, investing, and financing activities.
lk lk lk lk lk lk lk lk
C) the sales strategy for the operating, marketing, and sales activities.
lk lk lk lk lk lk lk lk lk
D) black and white details about the economics of operating activities. Answer: B
lk lk lk lk lk lk lk lk lk lk lk lk
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Communication Bloom'
lk lk lk lk lk lk lk lk lk
s: Comprehension AICPA: AC: Reporting
lk lk lk lk
2) Accounting communicates the financial outcomes of a business's activities for
lk lk lk lk lk lk lk lk lk
A) operating.
B) investing.
C) financing.
D) All of these answer choices are correct. Answer: D
lk lk lk lk lk lk lk lk lk
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Communication Bloom'
lk lk lk lk lk lk lk lk lk
s: Comprehension AICPA: AC: Reporting
lk lk lk lk
3) In what way do management teams use accounting data?
lk lk lk lk lk lk lk lk
A) Management teams use accounting data to make business decisions.
lk lk lk lk lk lk lk lk
B) Management teams use accounting data to make and execute plans.
lk lk lk lk lk lk lk lk lk
C) Management teams use economic and accounting data together to make decisions.
lk lk lk lk lk lk lk lk lk lk
D) All of these answer choices are correct. Answer: D
lk lk lk lk lk lk lk lk
Test Bank Page 2
,Diff: 1 lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Comprehension
l k
AICPA: AC: Risk Assessment, Analysis, and Management
l k lk lk lk lk lk
4) Which statement is TRUE?
lk lk lk
A) Accounting consists of rigid black and white rules.
lk lk lk lk lk lk lk
B) Accountants crunch numbers, not make decisions. lk lk lk lk lk
C) Accounting helps support a prosperous society. lk lk lk lk lk
D) Accountants focus on debits and credits, not business activities. Answer: C
lk lk lk lk lk lk lk lk lk lk l
k Diff: 1lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Comprehension AICPA: N/A
lk lk lk
5) Which of the following is NOT a component of an information system?
lk lk lk lk lk lk lk lk lk lk lk
A) Hardware
B) Software
C) Input
D) Network Answer: C Diff: 1 lk lk lk lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Knowledge
l k
AICPA: AC: Systems and Process Management
l k lk lk lk lk
6) Input to an information system consists of
lk lk lk lk lk lk
A) raw and unorganized data.
lk lk lk
Test Bank Page 3
, B) hardware and software. lk lk
C) reported information. lk
D) processed data. lk
Answer: A l k
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Knowledge
l k
AICPA: AC: Systems and Process Management
l k lk lk lk lk
7) Which of the following is a definition of output from an information system?
lk lk lk lk lk lk lk lk lk lk lk lk
A) Output is raw and unorganized data.
lk lk lk lk lk
B) Output is information produced by processing data.
lk lk lk lk lk lk
C) Output is database facts and figures.
lk lk lk lk lk
D) Output is information collected from users. Answer: B
lk lk lk lk lk lk lk
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Comprehension
l k
AICPA: AC: Systems and Process Management
l k lk lk lk lk
8) Which statement concerning data is TRUE?
lk lk lk lk lk
A) Data is useless to a business until transformed into information.
lk lk lk lk lk lk lk lk lk
B) Data is the output from an information system.
lk lk lk lk lk lk lk
C) Data is organized into understandable formats.
lk lk lk lk lk
D) Data is processed before being input into the information system. Answer: A
lk lk lk lk lk lk lk lk lk lk lk lk
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Test Bank Page 4
,Chapter 01: Accounting as Information
lk lk lk lk
1) Accounting communicates to stakeholders lk lk lk
A) minimally required public financial data. lk lk lk lk
B) the financial outcomes of operating, investing, and financing activities.
lk lk lk lk lk lk lk lk
C) the sales strategy for the operating, marketing, and sales activities.
lk lk lk lk lk lk lk lk lk
D) black and white details about the economics of operating activities. Answer: B
lk lk lk lk lk lk lk lk lk lk lk lk
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Communication Bloom'
lk lk lk lk lk lk lk lk lk
s: Comprehension AICPA: AC: Reporting
lk lk lk lk
2) Accounting communicates the financial outcomes of a business's activities for
lk lk lk lk lk lk lk lk lk
A) operating.
B) investing.
C) financing.
D) All of these answer choices are correct. Answer: D
lk lk lk lk lk lk lk lk lk
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Communication Bloom'
lk lk lk lk lk lk lk lk lk
s: Comprehension AICPA: AC: Reporting
lk lk lk lk
3) In what way do management teams use accounting data?
lk lk lk lk lk lk lk lk
A) Management teams use accounting data to make business decisions.
lk lk lk lk lk lk lk lk
B) Management teams use accounting data to make and execute plans.
lk lk lk lk lk lk lk lk lk
C) Management teams use economic and accounting data together to make decisions.
lk lk lk lk lk lk lk lk lk lk
D) All of these answer choices are correct. Answer: D
lk lk lk lk lk lk lk lk
Test Bank Page 2
,Diff: 1 lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Comprehension
l k
AICPA: AC: Risk Assessment, Analysis, and Management
l k lk lk lk lk lk
4) Which statement is TRUE?
lk lk lk
A) Accounting consists of rigid black and white rules.
lk lk lk lk lk lk lk
B) Accountants crunch numbers, not make decisions. lk lk lk lk lk
C) Accounting helps support a prosperous society. lk lk lk lk lk
D) Accountants focus on debits and credits, not business activities. Answer: C
lk lk lk lk lk lk lk lk lk lk l
k Diff: 1lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Comprehension AICPA: N/A
lk lk lk
5) Which of the following is NOT a component of an information system?
lk lk lk lk lk lk lk lk lk lk lk
A) Hardware
B) Software
C) Input
D) Network Answer: C Diff: 1 lk lk lk lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Knowledge
l k
AICPA: AC: Systems and Process Management
l k lk lk lk lk
6) Input to an information system consists of
lk lk lk lk lk lk
A) raw and unorganized data.
lk lk lk
Test Bank Page 3
, B) hardware and software. lk lk
C) reported information. lk
D) processed data. lk
Answer: A l k
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Knowledge
l k
AICPA: AC: Systems and Process Management
l k lk lk lk lk
7) Which of the following is a definition of output from an information system?
lk lk lk lk lk lk lk lk lk lk lk lk
A) Output is raw and unorganized data.
lk lk lk lk lk
B) Output is information produced by processing data.
lk lk lk lk lk lk
C) Output is database facts and figures.
lk lk lk lk lk
D) Output is information collected from users. Answer: B
lk lk lk lk lk lk lk
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Section Reference: Why is Accounting Information Important? AACSB: Analytic Bloom's
lk lk lk lk lk lk lk lk lk
: Comprehension
l k
AICPA: AC: Systems and Process Management
l k lk lk lk lk
8) Which statement concerning data is TRUE?
lk lk lk lk lk
A) Data is useless to a business until transformed into information.
lk lk lk lk lk lk lk lk lk
B) Data is the output from an information system.
lk lk lk lk lk lk lk
C) Data is organized into understandable formats.
lk lk lk lk lk
D) Data is processed before being input into the information system. Answer: A
lk lk lk lk lk lk lk lk lk lk lk lk
Diff: 1
lk
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of infor
lk lk lk lk lk lk lk lk lk lk lk lk lk lk
mation.
Test Bank Page 4
