,Accounting - What the Numbers Mean, 12e (Marshall)
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Chapter 1 Accounting—Present and Past
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1) Which of the following entities would not require accounting information pertaining to their
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economic activities?
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A) Social clubs. p
B) Not-for-profit entities. p
C) State governments.
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D) All of these entities require accounting information.
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Answer: D p
Difficulty: 1 Easy
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Topic: What Is Accounting?
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Learning Objective: 01-02 Identify who the users of accounting information are and explain
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why they find accounting information useful.
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Bloom's: Remember p
pAACSB: Analytical p
Thinking
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Accessibility: Keyboard Navigation p p
2) The authoritative financial accounting standards-setting body in the United States is presently
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the:
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A) Securities and Exchange Commission (SEC) p p p p
B) International Accounting Standards Board (IASB) p p p p
C) Public Company Accounting Oversights Board (PCAOB)
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D) Financial Accounting Standards Board (FASB)
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E) Accounting Principles Board (APB) p p p
Answer: D p
Difficulty: 1 Easy
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Topic: How Has Accounting Developed?
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Learning Objective: 01-05 Explain the role that the FASB plays in the development of financial
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accounting standards.
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Bloom's: Remember p
pAACSB: Analytical p
Thinking
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Accessibility: Keyboard Navigation p p
1
,3) Which of the following statements about the Financial Accounting Standards Board is
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correct?
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A) The FASB is an agency of the Federal government.
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B) The FASB has the authority to fine a noncompliant firm.
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C) The FASB follows a due process procedure that permits input from interested parties before
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an Accounting Standards Update (ASU) is issued.
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D) The FASB is controlled by the American Institute of CPAs.
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Answer: C p
Difficulty: 2 Medium
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Topic: How Has Accounting Developed?
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Learning Objective: 01-05 Explain the role that the FASB plays in the development of financial
p p p p p p p p p p p p p p
accounting standards.
p p
Bloom's: Understand p
AACSB: Analytical
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Thinking
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Accessibility: Keyboard Navigation p p
4) Major classifications of accounting activity would not include:
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A) financial accounting, internal auditing, public accounting.
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B) internal auditing, governmental accounting, managerial accounting.
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C) financial accounting, national accounting, cost accounting.
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D) auditing, income tax accounting, governmental accounting.
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Answer: C p
Difficulty: 1 Easy
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Topic: What Is Accounting?
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Learning Objective: 01-03 Identify the variety of professional services that accountants provide.
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Bloom's: Remember
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AACSB: Analytical Thinking p p
Accessibility: Keyboard Navigation
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5) Which of the following is not an example of a decision or informed judgment that a potential
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investor would make from accounting information?
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A) Future profitability based on past profitability.
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B) Probability of success of a new product development. p p p p p p p
C) A forecast of dividends.
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D) Assessment of risk that a company may have more debt than it can repay if the economy
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enters a recession.
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Answer: B p
Difficulty: 2 Medium
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Topic: What Is Accounting?
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Learning Objective: 01-02 Identify who the users of accounting information are and explain
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why they find accounting information useful.
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Bloom's: Understand p
2
, AACSB: Reflective
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Thinking
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3
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Chapter 1 Accounting—Present and Past
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1) Which of the following entities would not require accounting information pertaining to their
p p p p p p p p p p p p
economic activities?
p p
A) Social clubs. p
B) Not-for-profit entities. p
C) State governments.
p
D) All of these entities require accounting information.
p p p p p p
Answer: D p
Difficulty: 1 Easy
p p p
Topic: What Is Accounting?
p p p
Learning Objective: 01-02 Identify who the users of accounting information are and explain
p p p p p p p p p p p p
why they find accounting information useful.
p p p p p p
Bloom's: Remember p
pAACSB: Analytical p
Thinking
p
Accessibility: Keyboard Navigation p p
2) The authoritative financial accounting standards-setting body in the United States is presently
p p p p p p p p p p p
the:
p
A) Securities and Exchange Commission (SEC) p p p p
B) International Accounting Standards Board (IASB) p p p p
C) Public Company Accounting Oversights Board (PCAOB)
p p p p p
D) Financial Accounting Standards Board (FASB)
p p p p
E) Accounting Principles Board (APB) p p p
Answer: D p
Difficulty: 1 Easy
p p p
Topic: How Has Accounting Developed?
p p p p
Learning Objective: 01-05 Explain the role that the FASB plays in the development of financial
p p p p p p p p p p p p p p
accounting standards.
p p
Bloom's: Remember p
pAACSB: Analytical p
Thinking
p
Accessibility: Keyboard Navigation p p
1
,3) Which of the following statements about the Financial Accounting Standards Board is
p p p p p p p p p p p
correct?
p
A) The FASB is an agency of the Federal government.
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B) The FASB has the authority to fine a noncompliant firm.
p p p p p p p p p
C) The FASB follows a due process procedure that permits input from interested parties before
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an Accounting Standards Update (ASU) is issued.
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D) The FASB is controlled by the American Institute of CPAs.
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Answer: C p
Difficulty: 2 Medium
p p p
Topic: How Has Accounting Developed?
p p p p
Learning Objective: 01-05 Explain the role that the FASB plays in the development of financial
p p p p p p p p p p p p p p
accounting standards.
p p
Bloom's: Understand p
AACSB: Analytical
p p
Thinking
p
Accessibility: Keyboard Navigation p p
4) Major classifications of accounting activity would not include:
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A) financial accounting, internal auditing, public accounting.
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B) internal auditing, governmental accounting, managerial accounting.
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C) financial accounting, national accounting, cost accounting.
p p p p p
D) auditing, income tax accounting, governmental accounting.
p p p p p
Answer: C p
Difficulty: 1 Easy
p p p
Topic: What Is Accounting?
p p p
Learning Objective: 01-03 Identify the variety of professional services that accountants provide.
p p p p p p p p p p p
Bloom's: Remember
p p
AACSB: Analytical Thinking p p
Accessibility: Keyboard Navigation
p p p
5) Which of the following is not an example of a decision or informed judgment that a potential
p p p p p p p p p p p p p p p p
investor would make from accounting information?
p p p p p p
A) Future profitability based on past profitability.
p p p p p
B) Probability of success of a new product development. p p p p p p p
C) A forecast of dividends.
p p p
D) Assessment of risk that a company may have more debt than it can repay if the economy
p p p p p p p p p p p p p p p p
enters a recession.
p p p
Answer: B p
Difficulty: 2 Medium
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Topic: What Is Accounting?
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Learning Objective: 01-02 Identify who the users of accounting information are and explain
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why they find accounting information useful.
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Bloom's: Understand p
2
, AACSB: Reflective
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Thinking
p
3
