Test Bank Financial and Managerial Accounting: Financial Chapters, 7e (Miller-Nobles)

1
Financial and Managerial Accounting: Financial Chapters, 7e (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) Critical thinking and judgment skills are not necessary for accountants because
technology has made
the activities routine.
Answer: FALSE
Explanation: Technology plays an important supporting role in performing routine
accounting
functions. This allows accountants to have more time to focus on reviewing and evaluating
economic
activities using critical thinking and judgment.
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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Accounting The Financial Chapters 7th Edition Nobles
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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




DOWNLOAD THE Test Bank for Horngrens Financial and Managerial
Accounting The Financial Chapters 7th Edition Nobles
mynursytest.store
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Copyright © 2021 Pearson Education, Inc.
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