ESTUDYR
ACC 311 UPDATED EXAM WITH MOST TESTED QUESTIONS
AND ANSWERS | GRADED A+ | ASSURED SUCCESS WITH
DETAILED RATIONALES
What are the principal means through which a company communicates its financial
information to those outside it?
A. Managerial reports
B. Internal memos
C. Financial statements
D. Tax returns
Rationale: Financial statements (balance sheet, income statement, statement of cash flows,
statement of equity, notes) are the formal documents used to communicate a company’s
financial position and performance to external users.
Which discipline provides information used by external users to make capital allocation
decisions?
A. Managerial accounting
B. Financial accounting
C. Cost accounting
D. Tax accounting
Rationale: Financial accounting prepares general-purpose financial reports for outside
stakeholders (investors, creditors) who use the information for capital allocation.
What term describes a process that promotes productivity and creates efficient markets for
securities and credit?
A. Financial reporting cycle
B. Capital allocation process
C. Auditing process
D. Regulatory oversight
Rationale: Efficient capital allocation directs funds to the most productive uses, enabling
liquidity in markets for buying/selling securities and for granting credit.
What best summarizes the primary aim of financial reporting?
A. Maximize taxable income
B. Objective of financial reporting
C. Protect company secrets
D. Minimize audit fees
, ESTUDYR
Rationale: The objective of financial reporting is to provide useful financial information for
decision making by present and potential investors, creditors, and other users.
Why are investors interested in financial reporting?
A. To obtain managerial salaries
B. To prepare tax returns
C. Decision-Usefulness approach
D. To set regulatory policy
Rationale: The decision-usefulness approach holds that financial reports should provide
information useful to investors in making resource allocation decisions.
Which phrase describes those who use financial statements and may have both coinciding
and conflicting information needs?
A. Tax authorities
B. Internal auditors
C. Users of financial statements
D. Standards setters
Rationale: Users of financial statements include investors, creditors, regulators, employees—
each with overlapping but sometimes conflicting information needs.
Which early U.S. accounting committee issued Accounting Research Bulletins before the
APB?
A. FASB Advisory Council
B. Securities and Exchange Commission
C. Committee on Accounting Procedure (CAP)
D. American Accounting Association
Rationale: The Committee on Accounting Procedure (CAP), under the AICPA, issued Accounting
Research Bulletins from 1939–1959 before being replaced by the APB.
Which body issues fundamental conceptual statements used by the FASB in developing
standards?
A. AICPA Council
B. SEC Commissioners
C. Statements of Financial Accounting Concepts
D. Financial Accounting Foundation
Rationale: The FASB’s Statements of Financial Accounting Concepts establish the objectives and
concepts that guide standard setting (they are not authoritative GAAP but guide the FASB).
Which organization created the Accounting Principles Board (APB) in 1959?
A. Securities and Exchange Commission (SEC)
ACC 311 UPDATED EXAM WITH MOST TESTED QUESTIONS
AND ANSWERS | GRADED A+ | ASSURED SUCCESS WITH
DETAILED RATIONALES
What are the principal means through which a company communicates its financial
information to those outside it?
A. Managerial reports
B. Internal memos
C. Financial statements
D. Tax returns
Rationale: Financial statements (balance sheet, income statement, statement of cash flows,
statement of equity, notes) are the formal documents used to communicate a company’s
financial position and performance to external users.
Which discipline provides information used by external users to make capital allocation
decisions?
A. Managerial accounting
B. Financial accounting
C. Cost accounting
D. Tax accounting
Rationale: Financial accounting prepares general-purpose financial reports for outside
stakeholders (investors, creditors) who use the information for capital allocation.
What term describes a process that promotes productivity and creates efficient markets for
securities and credit?
A. Financial reporting cycle
B. Capital allocation process
C. Auditing process
D. Regulatory oversight
Rationale: Efficient capital allocation directs funds to the most productive uses, enabling
liquidity in markets for buying/selling securities and for granting credit.
What best summarizes the primary aim of financial reporting?
A. Maximize taxable income
B. Objective of financial reporting
C. Protect company secrets
D. Minimize audit fees
, ESTUDYR
Rationale: The objective of financial reporting is to provide useful financial information for
decision making by present and potential investors, creditors, and other users.
Why are investors interested in financial reporting?
A. To obtain managerial salaries
B. To prepare tax returns
C. Decision-Usefulness approach
D. To set regulatory policy
Rationale: The decision-usefulness approach holds that financial reports should provide
information useful to investors in making resource allocation decisions.
Which phrase describes those who use financial statements and may have both coinciding
and conflicting information needs?
A. Tax authorities
B. Internal auditors
C. Users of financial statements
D. Standards setters
Rationale: Users of financial statements include investors, creditors, regulators, employees—
each with overlapping but sometimes conflicting information needs.
Which early U.S. accounting committee issued Accounting Research Bulletins before the
APB?
A. FASB Advisory Council
B. Securities and Exchange Commission
C. Committee on Accounting Procedure (CAP)
D. American Accounting Association
Rationale: The Committee on Accounting Procedure (CAP), under the AICPA, issued Accounting
Research Bulletins from 1939–1959 before being replaced by the APB.
Which body issues fundamental conceptual statements used by the FASB in developing
standards?
A. AICPA Council
B. SEC Commissioners
C. Statements of Financial Accounting Concepts
D. Financial Accounting Foundation
Rationale: The FASB’s Statements of Financial Accounting Concepts establish the objectives and
concepts that guide standard setting (they are not authoritative GAAP but guide the FASB).
Which organization created the Accounting Principles Board (APB) in 1959?
A. Securities and Exchange Commission (SEC)
