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Ch 1 [Www.jamaa Bzu.com]

Ch 1 [Www.jamaa Bzu.com]

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Published by Bayan Sharif

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Published by: Bayan Sharif on Oct 04, 2010
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03/09/2013

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CHAPTER 1MULTIPLE CHOICE QUESTIONS
41.Accountants refer to an economic event as a
c.transaction.
42.The process of recording transactions has become more efficient because
b.computers are used in processing business events.
43.Communication of economic events is the part of the accounting process thatinvolves
c.preparing accounting reports.
44.Which of the following events cannot be quantified into dollars and cents andrecorded as an accounting transaction?
a.The appointment of a new CPA firm to perform an audit.
45.The use of computers in recording business events
a.has made the recording process more efficient. 
46.The accounting process involves all of the following except
c.recording nonquantifiable economic events.
47.The accounting process is correctly sequenced as
c.identification, recording, communication.
48.Which of the following techniques are not used by accountants to interpret and reportfinancial information?
b.Special memos for each class of external users
49.Which of the following would not be considered an internal user of accounting data for the XYZ Company?
d.President of the employees' labor union
50.Which of the following would not be considered an external user of accounting datafor the XYZ Company?
b.Management
51.Which of the following would not be considered internal users of accounting data for acompany?
c.Creditors of a company
52.Which of the following is an other external user of accounting information?
a.Labor unions
53.Which one of the following is an external user with a financial interest?
c.Investors
54.Bookkeeping differs from accounting in that bookkeeping primarily involves which partof the accounting process?
c.Recording
55.All of the following are services offered by public accountants except
a.budgeting.
56.Which list below best describes the major services performed by public accountants?
c.Auditing, taxation, management consulting
 
57.Preparing tax returns and engaging in tax planning is performed by
c.both public and private accountants.
58.The origins of accounting are generally attributed to the work of 
c.Luca Pacioli.
59.A private accountant can perform many activities in a business organization butwould not work in
c.external auditing.
60.An accountant working in the not-for-profit sector would not be employed by
c.a large retail department store.
61.Ethics are the standards of conduct by which one's actions are judged as
a.right or wrong.b.honest or dishonest.c.fair or unfair.
d.all of these.
62.Generally accepted accounting principles are
b.standards that indicate how to report economic events.
63.The cost principle requires that when assets are acquired, they be recorded at
b.exchange price paid.
64.The cost of an asset and its fair market value are
d.the same on the date of acquisition.
65.The body of theory underlying accounting is not based on
a.physical laws of nature.
66.The private sector organization involved in developing accounting principles is the
c.Financial Accounting Standards Board.
67.The SEC and FASB are two organizations that are primarily responsible foestablishing generally accepted accounting principles. It is true that
c.the SEC often mandates guidelines when no accounting principles exist.
68.GAAP stands fo
b.Generally Accepted Accounting Principles.
69.Which of the following is not a characteristic of the cost principle?
b.Subjectivity
70.The ACE Company has five plants nationwide that cost $200 million. Thecurrent market value of the plants is $600 million. The plants will be recorded andreported as assets at
a.$200 million.
71.The proprietorship form of business organization
b.represents the largest number of businesses in the United States.
72.The economic entity assumption requires that the activities
 
d.of an entity be kept separate from the activities of its owner.
73.A business organized as a corporation
c.is owned by its stockholders.
74.The partnership form of business organization
b.is a common form of organization for service-type businesses.
75.Which of the following is not an advantage of the corporate form of businessorganization?
c.Unlimited personal liability for stockholders
76.A small neighborhood barber shop that is operated by its owner would likely beorganized as a
d.proprietorship.
77.Joan and Sara met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most commonform of business organization for a business such as this would be a
b.partnership.
78.Which of the following is true regarding the corporate form of business organization?
c.The revenues of corporations are greater than the combined revenues of partnerships and proprietorships.
79.A basic assumption of accounting that requires activities of an entity be kept separatefrom the activities of its owner is referred to as the
d.economic entity assumption.
80.Jo Smith is the proprietor (owner) of Smitty's, a retailer of athletic apparel. Whenrecording the financial transactions of Smitty's, Jo does not record an entry for a car she purchased for personal use. Jo took out a personal loan to pay for the car. Whataccounting concept guides Jo's behavior in this situation?
b.Economic entity assumption
81.A basic assumption of accounting assumes that the dollar is
c.the common unit of measure for all business transactions.
82.A problem with the monetary unit assumption is that
a.the dollar has not been stable over time.
83.The common characteristic possessed by all assets is
d.future economic benefit.
84.Owner's equity is best depicted by the following:
d.Assets – Liabilities.
85.The basic accounting equation may be expressed as
a.Assets = Equities.b.Assets – Liabilities = Owner's Equity.c.Assets = Liabilities + Owner's Equity.#####d.all of these.
86.Liabilities
c.possess service potential.

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