MULTIPLE CHOICE
1.Which of the following best describes accounting?
a.accounting is an information system for measuring and reporting on the transformation process
b.accounting is the creation of value through providing goods and services
c.accounting is the efficient and effective use of resources
d.accounting is the reporting of profits by an organization
2.Accounting provides information to help in making decisions about organizations. Which of the following statements concerning accounting information is FALSE? It helps decision makers determine
a.where they are
b.where they should be
c.where they have been
d.where they are going
3.The primary purpose of accounting is to
a.help people make decisions about economic activities
b.provide information that management can use to convince stockholders that management deserves high salaries
c.provide employment to persons who have a knack for dealing with numbers
d.minimize the amount of profit that a firm has earned
4.Accounting provides information that is helpful to decision makers because
a.it is a set of interrelated activities that work together to achieve a goal
b.they learn how to record transactions
c.it provides information about economic results that can be expected to occur
d.it is a collection of documents and records
5.The primary purpose of accounting is to
a.audit the financial information of businesses
b.certify the accuracy of records
c.facilitate decision making by the stakeholders
d.provide for internal control over financial transactions
6.The purpose of accounting is to
a.make sure people are following the rules
b.provide information to prepare tax returns
c.help people make decisions about economic activities
d.provide stockholders with information about a corporation's net income
7.Which of the following activities is (are) related to the primary purpose of accounting?
A department manager A business owner is reviewing
is reviewing the sales the projected expenses for
to customers last month the coming year
a.Yes Yes
b.Yes No
c.No Yes
d.No No
8.Risk can best be described as
a.the reporting of profit
b.the measurement of accounting information
c.uncertainty about an outcome
d.the recording of costs
9.All of the following would be an example of stakeholder except
a.the government
b.an employee
c.a stockbroker
d.a shareholder
10.A common purpose of all organizations is
a.providing employment
b.transforming resources
c.to sell products
d.paying taxes to various levels of government