Accounting, Vol. 1, 9e Cdn. Ed. (Horngren et al.)
Chapter 1 Accounting and the Business Environment
Objective 1-1
1) Financial statements provide information about business activities to decision makers.
Answer: TRUE
Diff: 1
Learning Outcome: A-02 Describe the components of and prepare the four basic financial
statements
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
2) Investors provide money to a business to begin operations.
Answer: TRUE
Diff: 2
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
3) Not-for-profit organizations need accounting information, as do profit-oriented organizations.
Answer: TRUE
Diff: 1
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
,Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
4) The designation CA stands for Certified Public Accountant.
Answer: FALSE
Diff: 1
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
,5) Which of the following users of accounting information seek to assess the organization's ability
to make scheduled payments?
A) creditors
B) taxing authorities
C) government regulatory agencies
D) employees
Answer: A
Diff: 2
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
6) The primary objective of financial reporting is to provide information:
A) to the federal government.
B) about the profitability of the business.
C) regarding the cash flows of the business.
D) useful for making investment decisions and for assessing management's stewardship.
Answer: D
Diff: 3
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
7) Which of the following statements best describes managerial accounting?
A) Managerial accounting focuses on information for internal decision making.
, B) Managerial accounting focuses on outside investors and lenders.
C) Managerial accounting provides information for the public.
D) Managerial accounting provides information for taxing authorities.
Answer: A
Diff: 1
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
Chapter 1 Accounting and the Business Environment
Objective 1-1
1) Financial statements provide information about business activities to decision makers.
Answer: TRUE
Diff: 1
Learning Outcome: A-02 Describe the components of and prepare the four basic financial
statements
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
2) Investors provide money to a business to begin operations.
Answer: TRUE
Diff: 2
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
3) Not-for-profit organizations need accounting information, as do profit-oriented organizations.
Answer: TRUE
Diff: 1
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
,Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
4) The designation CA stands for Certified Public Accountant.
Answer: FALSE
Diff: 1
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
,5) Which of the following users of accounting information seek to assess the organization's ability
to make scheduled payments?
A) creditors
B) taxing authorities
C) government regulatory agencies
D) employees
Answer: A
Diff: 2
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
6) The primary objective of financial reporting is to provide information:
A) to the federal government.
B) about the profitability of the business.
C) regarding the cash flows of the business.
D) useful for making investment decisions and for assessing management's stewardship.
Answer: D
Diff: 3
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
7) Which of the following statements best describes managerial accounting?
A) Managerial accounting focuses on information for internal decision making.
, B) Managerial accounting focuses on outside investors and lenders.
C) Managerial accounting provides information for the public.
D) Managerial accounting provides information for taxing authorities.
Answer: A
Diff: 1
Learning Outcome: A-01 Identify and apply accounting concepts and principles found in the
Conceptual Framework
Skill: Knowledge
Objective: 1-1 Define accounting, and describe the users of accounting information
