Test Bank for College Accounting (A Contemporary Approach), 6th Edition by David Haddock

Test Bank College Accounting (A Contemporary Approach), 6th Edition by David
dx dx dx dx dx dx dx dx dx dx




Haddock dx




Chap 01 6e Haddock dx dx dx




1) The purpose of accounting is to provide financial information about a business.
dx dx dx dx dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




2) A firm’s financial affairs are summarized in periodic reports called general ledgers.
dx dx dx dx dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




3) In a sole proprietorship, the owner is NOT responsible for the debts of the business if
dx dx dx dx dx dx dx dx dx dx dx dx dx dx dx




dx the company is unable to pay.
dx dx dx dx dx




⊚ true d x




⊚ false d x




4) Currently, generally accepted accounting principles are developed by the American
dx dx dx dx dx dx dx dx dx




Institute of Certified Public Accountants (AICPA).
dx dx dx dx dx dx




⊚ true d x




⊚ false d x




5) The Securities and Exchange Commission (SEC) requires that publicly owned
dx dx dx dx dx dx dx dx dx




corporations submit financial statements to it at least one time each year.
dx dx dx dx dx dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




6) Anyone can invest in a closely held corporation.
dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




7) Managerial Accounting is any activity associated with the preparation of tax returns and
dx dx dx dx dx dx dx dx dx dx dx dx




the audit of those returns.
dx dx dx dx dx




⊚ true d x




⊚ false d x




1

,8) When developing GAAP, one step undertaken by the FASB includes holding public
dx dx dx dx dx dx dx dx dx dx dx




hearings where interested parties can express their opinions.
dx dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




9) Public accountants work on the staff of federal, state, or local governmental units.
dx dx dx dx dx dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




10) The SEC uses financial information to determine a company's tax base.
dx dx dx dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




11) When a partner leaves the company, the partnership is dissolved and a new partnership
dx dx dx dx dx dx dx dx dx dx dx dx dx




may be formed with the remaining partners.
dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




12) Accounting is used to communicate financial information and therefore is called the
dx dx dx dx dx dx dx dx dx dx dx




“language of data”. dx dx




⊚ true d x




⊚ false d x




13) Some users of the financial information of a business are employed by the business
dx dx dx dx dx dx dx dx dx dx dx dx dx




dx while others are independent, outside parties.
dx dx dx dx dx




⊚ true d x




⊚ false d x




14) The certified bookkeeper designation indicates that an individual possesses the level of
dx dx dx dx dx dx dx dx dx dx dx




knowledge and skills needed to carry out all key accounting functions through the
dx dx dx dx dx dx dx dx dx dx dx dx dx




adjusted trial balance, including payroll.
dx dx dx dx dx




⊚ true d x




⊚ false d x




2

,15) Accountants provide financial information to various parties so they can make
dx dx dx dx dx dx dx dx dx dx




business decisions.
dx dx




⊚ true d x




⊚ false d x




16) When a business is organized as a sole proprietorship, the owner should combine
dx dx dx dx dx dx dx dx dx dx dx dx




his/her personal financial information with the business financial information.
dx dx dx dx dx dx dx dx dx




⊚ true d x




⊚ false d x




17) Which of the following government agencies has the authority to suspend trading of
dx dx dx dx dx dx dx dx dx dx dx dx




dx a company’s shares on stock exchanges?
dx dx dx dx dx




A) Internal Revenue Service dx dx




B) Federal Trade Commission dx dx




C) Financial Accounting Standards Board dx dx dx




D) Securities and Exchange Commission dx dx dx




18) Which of the following is not one of the major types of services provided by
dx dx dx dx dx dx dx dx dx dx dx dx dx dx




dx public accounting firms?
dx dx




A) auditing
B) bookkeeping
C) tax accounting dx




D) management advisory services dx dx




19) Which dx of the following is not a requirement for becoming a Certified Bookkeeper?
dx dx dx dx dx dx dx dx dx dx dx




A) pass a national exam
dx dx dx




B) obtain a certain number of college credits in accounting courses
dx dx dx dx dx dx dx dx dx




C) sign a code of ethics
dx dx dx dx




D) submit evidence satisfying an experience requirement
dx dx dx dx dx




3

, 20) The separate entity assumption applies to which of the following corporate forms?
dx dx dx dx dx dx dx dx dx dx dx




A) sole proprietorship dx




B) partnership
C) corporation
D) all of these answers are correct
dx dx dx dx dx




21) A sole proprietorship has how many owners?
dx dx dx dx dx dx




A) 1 d x d x




B) 2 d x d x




C) 3 d x d x




D) 4 d x d x




22) Accounting is often referred to as the language of:
dx dx dx dx dx dx dx dx




A) business.
B) finance.
C) money.
D) data.



23) The results of the accounting process are summarized in periodic reports called:
dx dx dx dx dx dx dx dx dx dx dx




A) cash budgets. dx




B) bank reconciliations. dx




C) financial statements. dx




D) worksheets.



24) Which of the following is not a goal of the internal controls implemented by owners
dx dx dx dx dx dx dx dx dx dx dx dx dx dx




and managers?
dx dx




A) to safeguard assets dx dx




B) to ensure reliability of accounting data
dx dx dx dx dx




C) to promote compliance with management policies and applicable laws
dx dx dx dx dx dx dx dx




D) to reduce expenses through the use of efficient processes
dx dx dx dx dx dx dx dx




4