Test Bank for Horngren's Accounting: The Financial Chapters, 14th Edition by Tracie Miller-Nobles & Brenda Mattison – Complete Chapters 1–17

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Horngren's Accounting,
The Financial Chapters,
14th edition Nobles Tracy
Miller




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,Horngren's Accounting, The Financial Chapters, 14th edition
Nobles
Chapter 1-17

Horngren's Accounting: The Financial Chapters, 14e (Miller-Nobles)
Chapter F:1 Accounting and the Business Environment

Learning Objective F:1-1
1) Accounting is the information system that measures business activities, processes the
information into reports, and communicates the results to decision makers.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why is Accounting Important? (H1)

2) The knowledge of accounting is rarely used to help make business and personal financial
decisions. Answer: FALSE
Explanation: The knowledge of accounting is used daily to assist in making decisions for both
businesses and personal items.
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why is Accounting Important? (H1)

3) Accounting starts with economic activities that accountants review and evaluate using critical
thinking and judgment to create useful information that helps individuals make good decisions.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why is Accounting Important? (H1)

4) Accounting is referred to as the language of business because it is the method of
communicating business information to decision makers.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why is Accounting Important? (H1)




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, 5) A model called the was created to help students and the public understand what
accounting is.
A) Decision Making Model
B) Business Model
C) Pathways Vision Model
D) Cost Model
Answer: C
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why is Accounting Important? (H1)

6) The Pathways Vision Model emphasizes that good decisions have an impact on .
A) accounting judgments and economic activity
B) accounting judgments only
C) economic activity only
D) neither accounting judgments nor economic
activity Answer: A
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why is Accounting Important? (H1)

7) Managerial accounting focuses on providing information for external decision
makers. Answer: FALSE
Explanation: Managerial accounting focuses on providing information for internal decision makers.
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users of Accounting Information

8) Investors primarily use managerial accounting information for decision-making
purposes. Answer: FALSE
Explanation: External users (investors) use financial accounting information.
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users of Accounting Information




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