Multiple Choice Questions
1.Which of the following entities would
not
require accounting information pertaining to their economic activities?
A. Social clubs.
B. Not-for-profit entities.
C. State governments.
D. All of these require accounting information.
E. None of these requires accounting information.
2.The authoritative financial accounting standards-setting body in the United States is presently the:
A. Securities and Exchange Commission (SEC).
B. International Accounting Standards Board (IASB).
C. Public Company Accounting Oversights Board (PCAOB).
D. Financial Accounting Standards Board (FASB).
E. Accounting Principles Board (APB).
3.Which of the following statements about the Financial Accounting Standards Board is correct?
A. The FASB is an agency of the Federal government.
B. The FASB has the authority to fine a noncompliant firm.
C. The FASB follows a due process procedure that permits input from interested parties before a standard is issued.
D. The FASB is controlled by the American Institute of CPA's.
E. None of these statements is correct.
4.Major classifications of accounting activity would
not
include:
A. financial accounting, internal auditing, public accounting.
B. internal auditing, governmental accounting, managerial accounting.
C. financial accounting, national accounting, cost accounting.
D. auditing, income tax accounting, governmental accounting.
5.Which of the following is
not
an example of a decision or informed judgment that a potential investor would make from accounting information?
A. Future profitability based on past profitability.
B. Probability of success of a new product development.
C. A forecast of dividends.
D. Assessment of risk that a company may have more debt than it can repay if the economy enters a recession.
6.Which of the following is
not
an example of a decision or informed judgment that a potential employee could make from accounting information?
A. Personnel turnover statistics (i.e., hiring and terminations).
B. Probability of the company's ability to make profit sharing plan contributions in the future.
C. Assessment of the risk that the company may become bankrupt in the near future.
D. The extent of the company's commitment to a research program.
7.Which of the following are qualified to express an auditor's opinion about an entity's financial statements?
A. A Comptroller.
B. A Certified Management Accountant.
C. A Certified Internal Auditor.
D. A Certified Public Accountant.
E. None of these.
8.Which classification of accounting is most concerned with the use of economic and financial information to plan and control many of the activities of the entity?
A. Financial accounting.
B. Auditing-Public accounting.
C. Managerial accounting.
D. Income tax accounting.
9.An unqualified auditors' opinion about an entity's financial statements:
A. is a clean bill of health.
B. means that all of the entity's transactions during the audited period were checked out.
C. guarantees that the entity was not involved in or the victim of any fraudulent activities during the audited period.
D. states that they are presented in conformance with U.S. generally accepted accounting principles.
10.Cost accounting is a subset of which of the following?
A. Internal auditing.
B. Public auditing.
C. Cost analysis.
D. Managerial accounting.
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