MULTIPLE CHOICE
1.External decisions makers:
a.are CPA’s who perform the company’s audit
b.rely on financial statements for information
c.sell stock to brokerage houses
d.are responsible to the shareholders
2.Corporations are required to provide annual financial reports to stockholders by order of
a.the U.S. Congress
b.the Securities Exchange Act of 1934
c.the New York Stock Exchange
d.the company’s Board of Directors
3.The SEC is responsible for overseeing
a.external financial reporting by publicly traded companies
b.financial reporting by government agencies
c.the audits of the Fortune 500 companies
d.the civil and criminal prosecution of government officials
4.Fair presentation means that the financial statements are prepared
a.in conformity with GAAS
b.in conformity with GAAP
c.in conformity with the IRS code
d.without any errors or omissions
5.Government authorities use accounting information to:
a.determine taxes owed by businesses
b.determine if a company is a going concern
c.determine number of employees in a company
d.use it in a census
6.The Securities Act of 1933 required most corporations to:
a.provide annual reports to investors
b.file income tax returns
c.file registration statements prior to going public
d.hire minority workers
7.The SEC can:
a.halt trading of a company’s stock
b.force a company to pay dividends
c.hire and fire managers
d.close a company down
8.Accounting regulations protect the interests of external decisions makers by:
a.publishing books on regulatory procedures
b.allowing them access to the company’s books and records
c.making sure that companies pay taxes
d.requiring companies to follow reporting standards
9.The agency authorized by law to establish and enforce accounting standards in the U. S. is the:
a.CPA
b.FASB
c.SEC
d.IRS
10.The Financial Accounting Standards Board
a.is a private organization that currently sets accounting standards for businesses in the United States
b.is a governmental organization that issues Statements of Accounting Standards
c.sets accounting standards for both businesses and state and local governments
d.was established by the U.S. Congress