51.Information contained in external financial reports can be useful to a firm's
Creditors Employees
a.No No
b.No Yes
c.Yes No
d.Yes Yes
52.Which of the following is a TRUE statement concerning large publicly-held corporations that must have their financial statements audited each year?
a.an audit involves an examination of the financial statements but not an examination of the accounting information system
b.financial accounting information is audited but managerial accounting information is not
c.these audits are usually conducted by the firm's own employee-accountants since they have the most knowledge of the firm's operations
d.the audit tends to increase investor risk
53.The primary purpose of an audit is to
a.discover if theft or fraud is occurring in the company
b.evaluate whether financial statements used by external decision makers, are fairly presented
c.demonstrate that the level of profits reported to the IRS is the same as that reported to creditors and owners
d.assure that the information used by managers in making financing, investing, and operating decisions is absolutely accurate
54.Match the type of accounting information to the term that best describes it.
Information prepared for Information prepared for
external decision makers internal decision makers
a.financial accounting financial accounting
b.financial accounting managerial accounting
c.managerial accounting financial accounting
d.managerial accounting managerial accounting
55.Match the type of accounting information to the term that best describes it.
Information prepared Information prepared
for a department manager’s use for a creditor’s use
a.managerial accounting financial accounting
b.managerial accounting managerial accounting
c.financial accounting financial accounting
d.financial accounting managerial accounting
56.Which of the following categories of accounting information are examined by the SEC to assure that it conforms to GAAP and SEC requirements?
Financial Managerial
Accounting Information Accounting Information
a.Yes Yes
b.Yes No
c.No No
d.No Yes
57.Accounting information
a.is helpful for financing decisions but not for marketing decisions
b.is useful for business firms but not needed for not-for-profit entities
c.must follow generally accepted accounting principles when provided to management
d.is useful for all organizations
58.Financial accounting is the process of
a.preparing and reporting accounting information for external decision makers
b.preparing and reporting accounting information for internal decision makers
c.developing generally accepted accounting principles
d.auditing financial statements
59.Which of the following is related to financial accounting, rather than managerial accounting?
a.the development of internal information systems
b.access by management to detailed internal financial reports
c.preparing financial information according to generally accepted accounting principles
d.cost accounting and cost management
60.Managerial accounting is
a.the process of preparing and reporting accounting information for external decision makers
b.the process of preparing and reporting accounting information for an organization’s internal decision makers
c.the process of developing generally accepted accounting principles
d.the process of auditing financial statements