51. The designation of CPA is given by:
A. Universities.
B. States.
C. The AICPA.
D. The SEC.
52. Which of the following is a characteristic of financial accounting information?
A. It's preparation requires judgment.
B. It is more about the future than it is about the past.
C. None of it is based on estimates, assumptions, and judgments.
D. Notes and explanations from management are not included.
53. The financial statements of a business entity:
A. Include the balance sheet, income statement, and income tax return.
B. Provide information about the cash flow prospects of the company.
C. Are the first step in the accounting process.
D. Are prepared for a fee by the Financial Accounting Standards Board.
54. Which of the following events is not a transaction that would be recorded in a company's accounting records?
A. The purchase of equipment for cash.
B. The purchase of equipment on account.
C. The investment of additional cash in the business by the owner.
D. The death of a key executive.
55. Financial statements are designed primarily to:
A. Provide managers with detailed information tailored to the managers' specific information needs.
B. Provide people outside the business organization with information about the company's financial position and operating results.
C. Report to the Internal Revenue Service the company's taxable income.
D. Indicate to investors in a particular company the current market values of their investments.
56. The principal difference between management accounting and financial accounting is that
financial
accounting
information is:
A. Prepared by managers.
B. Intended primarily for use by decision makers outside the business organization.
C. Prepared in accordance with a set of accounting principles developed by the Institute of Certified Management Accountants.
D. Oriented toward measuring solvency rather than profitability.
57. Which financial statement is prepared as of a specific date?
A. The balance sheet.
B. The income statement.
C. The statement of cash flows.
D. All three of the above are for a period of time rather than at a specific date.
58. In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a management accounting report is
more
likely to:
A. Be used by decision makers outside of the business organization.
B. Focus upon the operation results of the most recently completed accounting period.
C. View the entire organization as the reporting entity.
D. Be tailored to the specific needs of an individual decision maker.
59. Which of the following decision makers is
least
likely to be among the users of management accounting reports developed by Sears Roebuck and Co?
A. The chief executive officer of Sears.
B. The manager of the Automotive Department in a Sears' store.
C. The manager of a mutual fund considering investing in Sears' common stock.
D. Internal auditors within the Sears organization.
60. Which financial statement is primarily concerned with reporting the financial position of a business at a particular time?
A. The balance sheet.
B. The income statement.
C. The statement of cash flows.
D. All three statements are concerned with the financial position of a business at a particular time.