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Financial & Managerial Accounting, The Financial Chapters,
- The Marketplace to Buy and Sell your Study Material
8th Edition by Tracie Miller-Nobles
Financial and Managerial Accounting: Financial Chapters, 8e (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)
1
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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
2
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9) A creditor is a person who owes money to the business.
Answer: FALSE
Explanation: A creditor is a person to whom a business owes money.
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
10) Income tax is calculated using accounting information.
Answer: TRUE
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
11) Financial accounting focuses on information for decision makers outside of the business, such as
creditors and taxing authorities.
Answer: TRUE
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
12) Business owners use accounting information to set goals, evaluate progress toward those goals, and
make adjustments when needed.
Answer: TRUE
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
13) Outside investors ordinarily use financial accounting information to decide whether or not to invest
in a business.
Answer: TRUE
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
3
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Distribution of this document is illegal extra per year?
Downloaded by: CorrectSCORE | Want to earn $1.236
Distribution of this document is illegal extra per year?
,Test Bank for Horngren's Stuvia.com
Financial & Managerial Accounting, The Financial Chapters,
- The Marketplace to Buy and Sell your Study Material
8th Edition by Tracie Miller-Nobles
Financial and Managerial Accounting: Financial Chapters, 8e (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)
1
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Distribution of this document is illegal extra per year?
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
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
2
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9) A creditor is a person who owes money to the business.
Answer: FALSE
Explanation: A creditor is a person to whom a business owes money.
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
10) Income tax is calculated using accounting information.
Answer: TRUE
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
11) Financial accounting focuses on information for decision makers outside of the business, such as
creditors and taxing authorities.
Answer: TRUE
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
12) Business owners use accounting information to set goals, evaluate progress toward those goals, and
make adjustments when needed.
Answer: TRUE
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
13) Outside investors ordinarily use financial accounting information to decide whether or not to invest
in a business.
Answer: TRUE
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
3
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