Accounting for Decision Makers Exam Questions and Correct Answers Latest Update 2024 (Already
Passed)
1) Which of the following is the most correct definition of accounting?
a. The preservation of a systematic, quantitative record of an activity.
b. A system for providing quantitative information, primarily financial in nature, about economic entities
that is intended to be useful in making economic decisions.
c. The procedures and processes used by a company to analyze transactions and handle routine
bookkeeping tasks.
d. An entity without a profit objective, oriented toward providing services efficiently and effectively. -
Answers b. A system for providing quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making economic decisions.
2) Businesses use accounting systems to
a. Analyze transactions
b. Handle routine bookkeeping tasks
c. Evaluate the performance and health of the business
d. All of the above - Answers d. All of the above
3) Which of the following is NOT a function of accounting?
a. Executing sales transactions for organizations
b. Communicating economic information about organizations
c. Measuring economic information about organizations
d. Accumulating economic information about organizations - Answers a. Executing sales transactions for
organizations
4) Which of the following is NOT a key component of the definition of accounting?
a. Financial
b. Decision-oriented
c. Qualitative
d. Useful - Answers c. Qualitative
5) Which of the following is NOT typically true of accounting information?
,a. The information relates to specific accounting entities.
b. The information is primarily financial in nature.
c. The information relates to future time periods.
d. The information is quantitative in nature. - Answers d. The information is quantitative in nature.
6) Which of the following is NOT one of the three primary financial statements?
a. Balance Sheet
b. Income statement
c. Statement of cash flows
d. Statement of retained earnings - Answers d. Statement of retained earnings
7) Which of the following financial statements reports a company's resources, obligations, and owner's
equity?
a. Statement of retained earnings
b. Statement of cash flows
c. Income statement
d. Balance sheet - Answers d. Balance sheet
8) Which of the following financial statements reports the excess of a company's revenues over its
expenses?
a. Statement of retained earnings
b. Statement of cash flows
c. Income statement
d. Balance sheet - Answers c. Income statement
9) Which of the following financial statements reports the amount of cash collected and paid out by a
company?
a. Balance sheet
b. Statement of retained earnings
c. Statement of cash flows
d. Income statement - Answers c. Statement of cash flows
,10) The emphasis in financial accounting is on which of the following external user groups?
a. Management
b. Investors and creditors
c. Educators
d. Certified Public Accountants - Answers b. Investors and creditors
11) The primary internal group that uses accounting information is
a. Government agencies
b. Investors
c. Management
d. Competitors - Answers c. Management
12) Internal reports are generally used by
a. Lenders
b. Management
c. Employees
d. Suppliers - Answers b. Management
13) Which of the following is NOT an external user of financial information?
a. Competitors
b. Suppliers
c. Customers
d. Management - Answers d. Management
14) Which of the following is NOT true of the Financial Accounting Standards Board (FASB)?
a. It seeks consistency for its proposed standards
b. It consists of seven full-time members
c. It has no legal power to enforce the standards it sets
d. It is a government agency - Answers d. It is a government agency
, 15) Generally accepted accounting principles are
a. Natural laws
b. Based on scientific proofs
c. Developed by accounting rule makers
d. None of these are correct - Answers c. Developed by accounting rule makers
16) The initials GAAP stand for
a. Generally Applied Accounting Procedures
b. General Accounting Administration Practices
c. Generally Accepted Accounting Practices
d. Generally Accepted Accounting Principles - Answers d. Generally Accepted Accounting Principles
17) The current standard-setting board for accounting in the private sector in the US is the
a. Securities and Exchange Commission (SEC)
b. American Accounting Association (AAA)
c. International Accounting Standards Board (IASB)
d. Financial Accounting Standards Board (FASB) - Answers d. Financial Accounting Standards Board
(FASB)
18) The organization that develops worldwide accounting standards is the
a. International Accounting Standards Board (IASB)
b. International Board of Accounting Standards (IBAS)
c. International Committee on Accounting Standards (ICAS)
d. International Accounting Standards Committee (IASC) - Answers a. International Accounting Standards
Board (IASB)
19) Which of the following is NOT a service typically provided by large public accounting firms?
a. Making management decisions
b. Establishing accounting systems
c. Redesigning operating procedures
Passed)
1) Which of the following is the most correct definition of accounting?
a. The preservation of a systematic, quantitative record of an activity.
b. A system for providing quantitative information, primarily financial in nature, about economic entities
that is intended to be useful in making economic decisions.
c. The procedures and processes used by a company to analyze transactions and handle routine
bookkeeping tasks.
d. An entity without a profit objective, oriented toward providing services efficiently and effectively. -
Answers b. A system for providing quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making economic decisions.
2) Businesses use accounting systems to
a. Analyze transactions
b. Handle routine bookkeeping tasks
c. Evaluate the performance and health of the business
d. All of the above - Answers d. All of the above
3) Which of the following is NOT a function of accounting?
a. Executing sales transactions for organizations
b. Communicating economic information about organizations
c. Measuring economic information about organizations
d. Accumulating economic information about organizations - Answers a. Executing sales transactions for
organizations
4) Which of the following is NOT a key component of the definition of accounting?
a. Financial
b. Decision-oriented
c. Qualitative
d. Useful - Answers c. Qualitative
5) Which of the following is NOT typically true of accounting information?
,a. The information relates to specific accounting entities.
b. The information is primarily financial in nature.
c. The information relates to future time periods.
d. The information is quantitative in nature. - Answers d. The information is quantitative in nature.
6) Which of the following is NOT one of the three primary financial statements?
a. Balance Sheet
b. Income statement
c. Statement of cash flows
d. Statement of retained earnings - Answers d. Statement of retained earnings
7) Which of the following financial statements reports a company's resources, obligations, and owner's
equity?
a. Statement of retained earnings
b. Statement of cash flows
c. Income statement
d. Balance sheet - Answers d. Balance sheet
8) Which of the following financial statements reports the excess of a company's revenues over its
expenses?
a. Statement of retained earnings
b. Statement of cash flows
c. Income statement
d. Balance sheet - Answers c. Income statement
9) Which of the following financial statements reports the amount of cash collected and paid out by a
company?
a. Balance sheet
b. Statement of retained earnings
c. Statement of cash flows
d. Income statement - Answers c. Statement of cash flows
,10) The emphasis in financial accounting is on which of the following external user groups?
a. Management
b. Investors and creditors
c. Educators
d. Certified Public Accountants - Answers b. Investors and creditors
11) The primary internal group that uses accounting information is
a. Government agencies
b. Investors
c. Management
d. Competitors - Answers c. Management
12) Internal reports are generally used by
a. Lenders
b. Management
c. Employees
d. Suppliers - Answers b. Management
13) Which of the following is NOT an external user of financial information?
a. Competitors
b. Suppliers
c. Customers
d. Management - Answers d. Management
14) Which of the following is NOT true of the Financial Accounting Standards Board (FASB)?
a. It seeks consistency for its proposed standards
b. It consists of seven full-time members
c. It has no legal power to enforce the standards it sets
d. It is a government agency - Answers d. It is a government agency
, 15) Generally accepted accounting principles are
a. Natural laws
b. Based on scientific proofs
c. Developed by accounting rule makers
d. None of these are correct - Answers c. Developed by accounting rule makers
16) The initials GAAP stand for
a. Generally Applied Accounting Procedures
b. General Accounting Administration Practices
c. Generally Accepted Accounting Practices
d. Generally Accepted Accounting Principles - Answers d. Generally Accepted Accounting Principles
17) The current standard-setting board for accounting in the private sector in the US is the
a. Securities and Exchange Commission (SEC)
b. American Accounting Association (AAA)
c. International Accounting Standards Board (IASB)
d. Financial Accounting Standards Board (FASB) - Answers d. Financial Accounting Standards Board
(FASB)
18) The organization that develops worldwide accounting standards is the
a. International Accounting Standards Board (IASB)
b. International Board of Accounting Standards (IBAS)
c. International Committee on Accounting Standards (ICAS)
d. International Accounting Standards Committee (IASC) - Answers a. International Accounting Standards
Board (IASB)
19) Which of the following is NOT a service typically provided by large public accounting firms?
a. Making management decisions
b. Establishing accounting systems
c. Redesigning operating procedures
