ACCOUNTING MCGRAW HILL EXAM 1 QUESTIONS AND ANSWERS 2025

ACCOUNTING LATEST
MCGRAW HILL
EXAM 1
Which of the following is not a user of internal accounting information?


1) Store manager
2) Chief executive officer
3) Creditor
4) Chief financial officer - ANSWERS-Creditor


The set of standards, assumptions, and concepts that form the "ground
rules" for financial reporting in the United States is termed:


1) The conceptual framework
2) Generally accepted accounting principles
3) Statements of Financial Accounting Concepts
4) American standards for certified public accountants - ANSWERS-
Generally accepted accounting principles


Generally accepted accounting principles are intended to assist
accountants in preparing financial statements that:
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, ACCOUNTING LATEST
MCGRAW HILL
EXAM 1

1) Are relevant, verifiable, comparable, and understandable
2) Show the business to be both solvent and profitable
3) Comply with all income tax rules and regulations.
4) Are ideally suited to the specific needs of each user of the financial
statements - ANSWERS-Are relevant, verifiable, comparable, and
understandable


Which of the following is not an objective of generally accepted
accounting principles?


1) To minimize the amount of income taxes owed
2) To ensure that both preparers and users of financial statements
understand the concepts and assumptions used in presenting information
within these statements
3) To enhance the relevance and verifiability of information contained in
financial statements.
4) To increase the comparability of financial statements prepared by
different companies. - ANSWERS-To minimize the amount of income
taxes owed
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, ACCOUNTING LATEST
MCGRAW HILL
EXAM 1

Generally accepted accounting principles are the "ground rules" used in
the preparation of:


1) income tax returns
2) All accounting reports.
3) Reports to federal and state regulatory agencies
4) Financial statements. - ANSWERS-Financial statements


True or False: Notes payable and accounts payable both require a
company to pay an amount owed by a certain date. Notes payable
generally have interest, while accounts payable generally do not. -
ANSWERS-True


True or False: Total assets plus total liabilities must equal total owners'
equity. - ANSWERS-False


True or False: If a company purchases equipment with cash, its total
assets will increase. - ANSWERS-False
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