D196 Study Guide Questions with Verified
Correct Answers
Accounting plays a vital role in the decision-making process. Which action is the first
step in the decision-making process.
Identify the issues
The money that a company needs to buy its land, pay its employees, and buy its supplies
is called capital. What are the potential sources of capital for a business.
Investors, creditors, and retained business earnings.
Accountants measure and communicate the results of business activities.
True
Which primary area of accounting generates reports for internal users.
Management accounting
Which group use financial information to evaluate whether a company will be able to
repay a loan.
Lenders
Which of the primary financial statements reports the resources, obligations, and
owner's equity of a company
Balance sheet
What is the role of the IASB regulating accounting standards
Establish international accounting standards
What group of people make up the FASB
,People from a variety of business-related backgrounds
What is the role of the GASB in setting accounting standards
The GSAB is a private-sector organization the establishes accounting and financial reporting
standards for the U.S. state and local governments
In what way do accountants have an economic incentive to conduct themselves ethically
The value of the information produced by accountants is related to the confidence that users
have in the reliability of that information
How is it possible for an accountant to intentionally deceive financial statement users
and still technically be in compliance with generally accepted accounting principles
(GAAP)
There is flexibility inherent in the assumptions underlying the preparation of financial
statements
Your boss has approached you with a concerning letter from the IRS and ask you to
explain the role of the IRS in regulating accounting standards. Based on the role of the
IRS, what would be the problem detailed in the letter
The company has not filed its taxes in accordance to the law
Anika is considering investing in a tech company that is known for developing smart
home appliances. Before investing, Annika first wants to ensure that the companies past
performance has been satisfactory and that the company manages its cash flows well.
What type of accounting information would provide this evidence for Anika
Financial reports
, Alliah company just released it's public accounting data for 2019. Which user of
accounting information will monitor this data to ensure that the company is providing
sufficient information for investors.
Government agencies
A new product line manager approaches the accounting department in order to
understand the past performance of the product line he has been asked to manage in the
future. Which role of accounting involves obtaining and using financial information to
determine the financial health and performance of a business or product line?
Evaluation
You read in the newspaper that a local company you are familiar with has been found
guilty in court of publishing financial statements that are false and misleading to users
of those financial statements. In this situation, what could the American Institute of
Certified Public Accountants (AICPA) do in response to the accountants who were
found guilty of unethical conduct in accounting practices?
Implement professional sanctions
What is the correct summary sequence in the accounting cycle?
Analyze, Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a check stub, are an
important part of the accounting process. From an accounting cycle standpoint, what is
purpose of business documents?
To confirm that a transaction has occurred
What is the purpose of the financial accounting cycle?
Correct Answers
Accounting plays a vital role in the decision-making process. Which action is the first
step in the decision-making process.
Identify the issues
The money that a company needs to buy its land, pay its employees, and buy its supplies
is called capital. What are the potential sources of capital for a business.
Investors, creditors, and retained business earnings.
Accountants measure and communicate the results of business activities.
True
Which primary area of accounting generates reports for internal users.
Management accounting
Which group use financial information to evaluate whether a company will be able to
repay a loan.
Lenders
Which of the primary financial statements reports the resources, obligations, and
owner's equity of a company
Balance sheet
What is the role of the IASB regulating accounting standards
Establish international accounting standards
What group of people make up the FASB
,People from a variety of business-related backgrounds
What is the role of the GASB in setting accounting standards
The GSAB is a private-sector organization the establishes accounting and financial reporting
standards for the U.S. state and local governments
In what way do accountants have an economic incentive to conduct themselves ethically
The value of the information produced by accountants is related to the confidence that users
have in the reliability of that information
How is it possible for an accountant to intentionally deceive financial statement users
and still technically be in compliance with generally accepted accounting principles
(GAAP)
There is flexibility inherent in the assumptions underlying the preparation of financial
statements
Your boss has approached you with a concerning letter from the IRS and ask you to
explain the role of the IRS in regulating accounting standards. Based on the role of the
IRS, what would be the problem detailed in the letter
The company has not filed its taxes in accordance to the law
Anika is considering investing in a tech company that is known for developing smart
home appliances. Before investing, Annika first wants to ensure that the companies past
performance has been satisfactory and that the company manages its cash flows well.
What type of accounting information would provide this evidence for Anika
Financial reports
, Alliah company just released it's public accounting data for 2019. Which user of
accounting information will monitor this data to ensure that the company is providing
sufficient information for investors.
Government agencies
A new product line manager approaches the accounting department in order to
understand the past performance of the product line he has been asked to manage in the
future. Which role of accounting involves obtaining and using financial information to
determine the financial health and performance of a business or product line?
Evaluation
You read in the newspaper that a local company you are familiar with has been found
guilty in court of publishing financial statements that are false and misleading to users
of those financial statements. In this situation, what could the American Institute of
Certified Public Accountants (AICPA) do in response to the accountants who were
found guilty of unethical conduct in accounting practices?
Implement professional sanctions
What is the correct summary sequence in the accounting cycle?
Analyze, Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a check stub, are an
important part of the accounting process. From an accounting cycle standpoint, what is
purpose of business documents?
To confirm that a transaction has occurred
What is the purpose of the financial accounting cycle?
