1/31/25, 1:47 PM LO 1-1: Identify the ways accounting benefits society: SP2025 MBA 601-QL/QX Accounting / Finance for Mgrs
Question 1 pts
Businesses earn profits by converting financial, physical, and labor resources
into goods and services that satisfy consumer demands. This statement is
True
False
Businesses add value by converting financial, physical, and labor
resources into goods and services that consumers want. For example, a
homebuilder may borrow $150,000 from a bank and spend the money to
buy labor and materials to build a house. The house may sell for
$180,000 because a completed house is more valuable than
unconverted labor and materials. In this case, the profit is $30,000
($180,000 sales price of the house minus $150,000 cost of labor and
materials).
Question 2 pts
Resource owners want to provide resources to businesses with high profit
potential because those businesses will pay higher taxes. This statement is
True
False
When business must pay taxes, there is less profit available to share
with the resource owners. Thus, resource owners want to avoid the
consequences of taxation. The reason resource owners are willing to
provide resources to companies with high profits is because those
businesses have more profits to share with owners, are able to pay
more interest to creditors, and are in a better position to pay higher
prices for physical resources and wages. Ask yourself, would you want
to work for a company that paid low wages because it had to pay high
taxes.
,1/31/25, 1:47 PM LO 1-1: Identify the ways accounting benefits society: SP2025 MBA 601-QL/QX Accounting / Finance for Mgrs
Question 3 pts
Accounting provides a service to society by gathering and reporting information
about a company's profit potential. This statement is
True
False
Businesses that efficiently produce products customers want are
rewarded with high profits. For example, the invention and production of
the IPhone generated billions of dollars of profit for Apple Inc. Resource
owners prefer to provide resources to businesses with high earnings
potential because such companies are better able to compensate them.
Accounting provides a valuable service to society because it provides
information that investors, creditors, owners of physical resources, and
workers rely on to evaluate which businesses are worthy of receiving
their resources.
,1/31/25, 1:47 PM LO 1-1: Identify the ways accounting benefits society: SP2025 MBA 601-QL/QX Accounting / Finance for Mgrs
Question 4 pts
The primary purpose of managerial accounting is to prepare financial
statements in accordance with a reporting framework (e.g. GAAP).
True
False
, 1/31/25, 1:47 PM LO 1-1: Identify the ways accounting benefits society: SP2025 MBA 601-QL/QX Accounting / Finance for Mgrs
The primary purpose of managerial accounting is to assist mangers
within the Company in determining how much it costs to acquire
resources and convert them into saleable goods and services. There
are no official rules for managerial accounting; the type and quantity of
information collected and used by management is at their discretion. In
contrast, financial accounting information is prepared in accordance with
a reporting framework (e.g. G.A.A.P.) and primarily utilized by investors
and creditors that are external to the Company. These parties rely on
financial information to assist them in deciding whether to provide
resources to the Company.
Question 5 pts
Generally Accepted Accounting Principles (GAAP) are designed to provide
guidance for
financial accounting.
managerial accounting.
tax accounting.
auditing service accounting.
Question 1 pts
Businesses earn profits by converting financial, physical, and labor resources
into goods and services that satisfy consumer demands. This statement is
True
False
Businesses add value by converting financial, physical, and labor
resources into goods and services that consumers want. For example, a
homebuilder may borrow $150,000 from a bank and spend the money to
buy labor and materials to build a house. The house may sell for
$180,000 because a completed house is more valuable than
unconverted labor and materials. In this case, the profit is $30,000
($180,000 sales price of the house minus $150,000 cost of labor and
materials).
Question 2 pts
Resource owners want to provide resources to businesses with high profit
potential because those businesses will pay higher taxes. This statement is
True
False
When business must pay taxes, there is less profit available to share
with the resource owners. Thus, resource owners want to avoid the
consequences of taxation. The reason resource owners are willing to
provide resources to companies with high profits is because those
businesses have more profits to share with owners, are able to pay
more interest to creditors, and are in a better position to pay higher
prices for physical resources and wages. Ask yourself, would you want
to work for a company that paid low wages because it had to pay high
taxes.
,1/31/25, 1:47 PM LO 1-1: Identify the ways accounting benefits society: SP2025 MBA 601-QL/QX Accounting / Finance for Mgrs
Question 3 pts
Accounting provides a service to society by gathering and reporting information
about a company's profit potential. This statement is
True
False
Businesses that efficiently produce products customers want are
rewarded with high profits. For example, the invention and production of
the IPhone generated billions of dollars of profit for Apple Inc. Resource
owners prefer to provide resources to businesses with high earnings
potential because such companies are better able to compensate them.
Accounting provides a valuable service to society because it provides
information that investors, creditors, owners of physical resources, and
workers rely on to evaluate which businesses are worthy of receiving
their resources.
,1/31/25, 1:47 PM LO 1-1: Identify the ways accounting benefits society: SP2025 MBA 601-QL/QX Accounting / Finance for Mgrs
Question 4 pts
The primary purpose of managerial accounting is to prepare financial
statements in accordance with a reporting framework (e.g. GAAP).
True
False
, 1/31/25, 1:47 PM LO 1-1: Identify the ways accounting benefits society: SP2025 MBA 601-QL/QX Accounting / Finance for Mgrs
The primary purpose of managerial accounting is to assist mangers
within the Company in determining how much it costs to acquire
resources and convert them into saleable goods and services. There
are no official rules for managerial accounting; the type and quantity of
information collected and used by management is at their discretion. In
contrast, financial accounting information is prepared in accordance with
a reporting framework (e.g. G.A.A.P.) and primarily utilized by investors
and creditors that are external to the Company. These parties rely on
financial information to assist them in deciding whether to provide
resources to the Company.
Question 5 pts
Generally Accepted Accounting Principles (GAAP) are designed to provide
guidance for
financial accounting.
managerial accounting.
tax accounting.
auditing service accounting.
