ACG 2021 PATERSON FSU CH.1 QUIZ
QUESTIONS WITH COMPLETE
SOLUTIONS
,Which of these is a business organized as a separate legal entity where owners are not
personally liable for any of the organization's debts?
A. Partnerships
B. Corporations
C. Sole proprietorships and partnerships, but not corporations
D. Sole proprietorships
E. Sole proprietorships, partnerships, and corporations - ANSWERCorporations have
one or more owners called stockholders. Stockholders are considered to be separate
from the corporation; stockholders are not personally liable for the corporation's debts.
Proprietorships and partnerships are not considered to be separate from their owners;
their owners are personally liable for the company's debts.
Which statement about users of accounting information is correct?
A. Regulatory authorities are considered internal users.
B. Creditors are considered external users.
C. Labor unions are considered internal users.
D. Management is considered an external user.
E. Taxing authorities are considered internal users. - ANSWERB. Creditors are
considered external users
Users of a company's accounting information include internal users and external users.
Examples of internal users include the company's employees (e.g., management,
human resource personnel, marketing personnel, and finance personnel). Examples of
external users include the company's investors (i.e., owners), creditors, taxing
authorities, customers, labor unions, and regulatory authorities.
Which of the following best defines accounting?
A. The action or business of promoting and selling products or services, including
market research and advertising.
B. The organization and coordination of the activities of a business in order to achieve
defined objectives.
C. The information system that identifies, measures, and communicates economic
information to permit informed judgements and decisions by the users of the
information.
D. The management of large amounts of money, especially by governments or large
companies.
E. The processing system and regulatory rules for determining the fair market value of a
business organization. - ANSWERC. The information system that identifies, measures,
and communicates economic information to permit informed judgements and decisions
by the users of the information.
, Accounting is the information system that identifies, measures, and communicates
economic information to permit informed judgements and decisions by the users of the
information.
Which of the following is required as a result of the Sarbanes-Oxley Act (SOX) passed
into law in 2002?
A. Companies that go bankrupt must repay shareholders for lost investments.
B. The independence of outsides auditors increased.
C. None of these
D. Corporate income tax rates increased.
E. All shareholders now have an oversight role of the company's financial activities. -
ANSWERB. The independence of outsides auditors increased.
SOX was created by Congress and signed into law by the President to reduce unethical
corporate behavior and to decrease the likelihood of future corporate scandals. The
following summarizes the effects of SOX. Top management must certify the financial
statements for their company. SOX also increased the independence of outside auditors
who review the accuracy of corporate financial statements, and it increased the
oversight role of boards of directors.
Which of the following best defines assets
A. the amount of resources owned by a company minus the claims on those resources.
B. the cash owned by the company.
C. resources belonging to a company that have a future benefit to the company.
D. the cash in the company s bank accounts.
E. owners' investment in the business. - ANSWERC. resources belonging to a company
that have a future benefit to the company.
Assets are the resources owned by a company. They are property. Examples include
cash, accounts receivable, equipment, etc.
Amounts earned on the sale of products or services to customers is known as
A. assets.
B. liabilities.
C. expenses.
D. revenue.
E. equity. - ANSWERD. revenue
Revenues are amounts earned on the sale of products or services to customers.
Common examples of revenues include sales revenue, service revenue, and interest
revenue. Expenses are the cost of assets consumed or services used in the process of
generating revenues. Common examples of expenses include wage expense,
QUESTIONS WITH COMPLETE
SOLUTIONS
,Which of these is a business organized as a separate legal entity where owners are not
personally liable for any of the organization's debts?
A. Partnerships
B. Corporations
C. Sole proprietorships and partnerships, but not corporations
D. Sole proprietorships
E. Sole proprietorships, partnerships, and corporations - ANSWERCorporations have
one or more owners called stockholders. Stockholders are considered to be separate
from the corporation; stockholders are not personally liable for the corporation's debts.
Proprietorships and partnerships are not considered to be separate from their owners;
their owners are personally liable for the company's debts.
Which statement about users of accounting information is correct?
A. Regulatory authorities are considered internal users.
B. Creditors are considered external users.
C. Labor unions are considered internal users.
D. Management is considered an external user.
E. Taxing authorities are considered internal users. - ANSWERB. Creditors are
considered external users
Users of a company's accounting information include internal users and external users.
Examples of internal users include the company's employees (e.g., management,
human resource personnel, marketing personnel, and finance personnel). Examples of
external users include the company's investors (i.e., owners), creditors, taxing
authorities, customers, labor unions, and regulatory authorities.
Which of the following best defines accounting?
A. The action or business of promoting and selling products or services, including
market research and advertising.
B. The organization and coordination of the activities of a business in order to achieve
defined objectives.
C. The information system that identifies, measures, and communicates economic
information to permit informed judgements and decisions by the users of the
information.
D. The management of large amounts of money, especially by governments or large
companies.
E. The processing system and regulatory rules for determining the fair market value of a
business organization. - ANSWERC. The information system that identifies, measures,
and communicates economic information to permit informed judgements and decisions
by the users of the information.
, Accounting is the information system that identifies, measures, and communicates
economic information to permit informed judgements and decisions by the users of the
information.
Which of the following is required as a result of the Sarbanes-Oxley Act (SOX) passed
into law in 2002?
A. Companies that go bankrupt must repay shareholders for lost investments.
B. The independence of outsides auditors increased.
C. None of these
D. Corporate income tax rates increased.
E. All shareholders now have an oversight role of the company's financial activities. -
ANSWERB. The independence of outsides auditors increased.
SOX was created by Congress and signed into law by the President to reduce unethical
corporate behavior and to decrease the likelihood of future corporate scandals. The
following summarizes the effects of SOX. Top management must certify the financial
statements for their company. SOX also increased the independence of outside auditors
who review the accuracy of corporate financial statements, and it increased the
oversight role of boards of directors.
Which of the following best defines assets
A. the amount of resources owned by a company minus the claims on those resources.
B. the cash owned by the company.
C. resources belonging to a company that have a future benefit to the company.
D. the cash in the company s bank accounts.
E. owners' investment in the business. - ANSWERC. resources belonging to a company
that have a future benefit to the company.
Assets are the resources owned by a company. They are property. Examples include
cash, accounts receivable, equipment, etc.
Amounts earned on the sale of products or services to customers is known as
A. assets.
B. liabilities.
C. expenses.
D. revenue.
E. equity. - ANSWERD. revenue
Revenues are amounts earned on the sale of products or services to customers.
Common examples of revenues include sales revenue, service revenue, and interest
revenue. Expenses are the cost of assets consumed or services used in the process of
generating revenues. Common examples of expenses include wage expense,
