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Financial and Managerial Accounting 14th Edition Test Bank

Financial and Managerial Accounting 14th Edition Test Bank ensures a deep understanding of topics with carefully crafted notes, diagrams, and examples.

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1. A corporation is a business that is legally separate and distinct from its owners. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 2. The role of accounting is to provide many different users with financial information to make economic decisions. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 3. Accounting information users need reports about the economic activities and condition of businesses. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 4. Managerial accounting information is used by external and internal users equally. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.ACBSP.APC.25 - Managerial Characteristics/Terminology ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5. Senior executives cannot be criminally prosecuted for the wrong doings they commit on behalf of the companies where they work. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.03 - Legal ACCT.AICPA.FN.03 - Measurement BUSPROG: Ethics 6. Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 7. Proper ethical conduct implies that you only consider what's in your best interest. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.BB.03 - Legal ACCT.AICPA.FN.03 - Measurement BUSPROG: Ethics 8. Some of the major fraudulent acts by senior executives started as what they considered to be small ethical lapses which grew out of control. a. True b. False ANSWER: True

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.BB.03 - Legal ACCT.AICPA.FN.03 - Measurement BUSPROG: Ethics 9. A business is an organization in which basic resources or inputs, like materials and labor, are assembled and processed to provide outputs in the form of goods or services to customers. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.BB.01 - Industry ACCT.AICPA.BB.06 - Resource Management BUSPROG: Analytic 10. Two factors that typically lead to ethical violations are relevance and timeliness of accounting information. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 11. An example of a general - purpose financial statement would be a report about projected price increases related to transportation costs. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12. The Sarbanes - Oxley Act established standards for corporate responsibility and disclosure. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.20 - Accounting for Corporations ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Ethics 13. The main objective for all business is to maximize unrealized profits. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 14. The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing entities. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 15. The basic difference between manufacturing and merchandising companies is the completion level of the products they purchase for resale to customers. a. True b. False ANSWER: True

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 16. Proprietorships are owned by one owner and provide only services to their customers. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 17. About 90% of the businesses in the United States are organized as corporations. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 18. An example of an external user of accounting information is the federal government. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19. The Financial Accounting Standards Board (FASB) is the authoritative body that has primary responsibility for developing accounting principles. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 20. The cost principle is the basis for entering the purchase price into the accounting records. a. True b. False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 21. The monetary unit assumption requires that economic data be recorded in dollars for companies in the United States. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 22. If a building is appraised for $85,000, offered for sale at $90,000, and the buyer pays $80,000 cash for it, the buyer would record the building at $85,000. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23. The financial statements of a proprietorship should include the owner's personal assets and liabilities. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 FNMN.WARD.17.01 - 05 - LO: 01 - 05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 24. No significant differences exist between the accounting standards issued by the FASB and the IASB. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 25. Generally accepted accounting principles regulate how and what financial information is reported by businesses. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 02 - LO: 01 - 02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 26. The accounting equation can be expressed as Assets – Liabilities = Shareholder's Equity. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 03 - LO: 01 - 03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27. The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of stockholders. a. True b. False ANSWER: True DIFFICULTY: Challenging Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 03 - LO: 01 - 03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 28. The stockholders' rights to the assets rank ahead of the creditors' rights to the assets. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 03 - LO: 01 - 03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 29. If the liabilities owed by a business total $300,000 and stockholders' equity is equal to $300,000, then the assets also total $300,000. a. True b. False ANSWER: False RATIONALE: Assets = Liabilities + Stockholders’ Equity = $300,000 + $300,000 = $600,000 DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 03 - LO: 01 - 03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 30. If total assets decreased by $30,000 during a specific period and stockholders' equity decreased by $35,000 during the same period, the period's change in total liabilities was a $65,000 increase. a. True b. False ANSWER: False RATIONALE: Assets = Liabilities + Stockholders’ Equity – $30,000 = Liabilities + ( – $35,000) Liabilities = +$5,000

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 03 - LO: 01 - 03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 31. If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total stockholders' equity was a $200,000 increase. a. True b. False ANSWER: True RATIONALE: Assets = Liabilities + Stockholders’ Equity +$190,000 = – 10,000 + Stockholders’ Equity Stockholders’ Equity = +$200,000 DIFFICULTY: Moderate Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.17.01 - 03 - LO: 01 - 03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 32. If net income for a company was $50,000, $20,000 in cash dividends were paid and the shareholders invested $10,000 in cash, the stockholders' equity increased by $40,000. a. True b. False ANSWER: True RATIONALE: Increase in the stockholders' equity = Net income for the year – Cash dividends + Shareholders' investment = $50,000 – $20,000 + $10,000 = $40,000 DIFFICULTY: c Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 33. An account receivable is typically classified as a revenue. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.15 - Current Assets Reporting ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 34. An account receivable is a claim against a customer resulting from a sale on account. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.12 - Receivables Reporting ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 35. Paying an account payable increases liabilities and decreases assets. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.ACBSP.APC.16 - Current Liabilities Reporting ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 36. Receiving payments on an account receivable increases both equity and assets. a. True b. False ANSWER: False DIFFICULTY: Challenging Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 37. Dividends paid to stockholders decrease assets and increase equity. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 38. Purchasing supplies on account increases liabilities and decreases equity. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 39. Receiving a bill or otherwise being notified that an amount is owed is not recorded until the amount is paid. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.04 - Cash vs. Accrual ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 40. Revenue is earned only when money is received. a. True b. False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.04 - Cash vs. Accrual ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 41. Assets that are used up during the process of earning revenue are called expenses. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 04 - LO: 01 - 04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.ACBSP.APC.15 - Current Assets Reporting ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 42. The excess of revenue over the expenses incurred in earning the revenue is called capital. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 05 - LO: 01 - 05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 43. The primary financial statements of a corporation are the income statement, retained earnings statement, and the balance sheet. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 05 - LO: 01 - 05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 44. An income statement is a summary of the revenues and expenses of a business as of a specific date. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 05 - LO: 01 - 05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 45. A retained earnings statement reports the changes in the retained earnings for a period of time. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 05 - LO: 01 - 05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 46. The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 05 - LO: 01 - 05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.ACBSP.APC.24 - Statement of Cash Flows ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 47. The balance sheet represents the accounting equation. a. True b. False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 05 - LO: 01 - 05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 48. Net income and net profit do not mean the same thing. a. True b. False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 05 - LO: 01 - 05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 49. Profit is the difference between a. assets and liabilities b. the incoming cash and outgoing cash c. the assets purchased with cash contributed by the owner and the cash spent to operate the business d. the amounts received from customers for goods or services and the amounts paid for the inputs used to provide the goods or services ANSWER: d

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 50. Two common areas of accounting that respectively provide information to internal and external users are a. forensic accounting and financial accounting b. managerial accounting and financial accounting c. managerial accounting and environmental accounting d. financial accounting and tax accounting systems ANSWER: b DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 51. Which of the following best describes accounting? a. records economic data but does not communicate the data to users according to any specific rules b. is an information system that provides reports to users regarding economic activities and condition of a business c. is of no use by individuals outside of the business d. is used only for filling out tax returns and for financial statements for various type of governmental reporting requirements ANSWER: b DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 52. Which type of accountant typically practices as an individual or as a member of a public accounting firm? a. Certified Public Accountant b. Certified Payroll Professional c. Certified Internal Auditor d. Certified Management Accountant ANSWER: a

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    Chapter 1 - Introduction to Accounting and Business © 2017 Cengage Learning ® . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 53. Financial reports are used by a. management b. creditors c. investors d. all are correct ANSWER: d DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 54. All of the following are general - purpose financial statements except a. balance sheet b. income statement c. retained earnings statement d. cash budget ANSWER: d DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.17.01 - 01 - LO: 01 - 01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.BB.01 - Industry ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 55. Which of the following is a manufacturing business? a. General Motors b. Facebook c. American Airlines d. Target ANSWER: a

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