Question : Multiple Choice Questions 28.Financial accounting information is: A. Designed to assist investors and : 1259416

 

Multiple Choice Questions 

28.Financial accounting information is:   

A. Designed to assist investors and creditors.

 

B. Not used by managers and in income tax returns.

 

C. Called “special-purpose” accounting information.

 

D. Not applicable to individuals.

 

 

 

 

29.Which of the following does not describe accounting?   

A. It is commonly referred to as the language of business.

 

B. It is an end rather than a means to an end.

 

C. It is useful for decision-making.

 

D. It is used by businesses, governments, non-profit organizations, and individuals.

 

 

 

 

30.The field of accounting may best be described as:   

A. Recording the financial transactions of an economic entity.

 

B. Developing information in conformity with generally accepted accounting principles.

 

C. The art of interpreting, measuring, and describing economic activity.

 

D. Developing the information required for the preparation of income tax returns.

 

 

 

 

31.The basic purpose of bookkeeping is to:   

A. Provide financial information about an economic entity.

 

B. Develop the types of information best-suited to specific managerial decisions.

 

C. Record the financial transactions of an economic entity.

 

D. Determine the taxable income of individuals and business entities.

 

 

 

 

32.Which of the following is not characteristic of financial accounting?   

A. Information used in financial statements is prepared in conformity with generally accepted accounting principles.

 

B. The information is confidential and is intended for use only by company management.

 

C. The information is used in a wide variety of business decisions.

 

D. The information is developed primarily by “private accountants” that is, accountants employed by business organizations.

 

 

 

 

33.The accounting systems of most business organizations:   

A. Are tailored to meet the organization’s needs for accounting information and the resources available for operating the system.

 

B. Are similar in design to the journals, ledgers, and worksheets illustrated in this text.

 

C. Utilize data bases, rather than ledger accounts.

 

D. Are designed by the CPA firm that performs the annual financial audit.

 

 

 

 

34.The New York Stock Exchange and the NASDAQ both require all listed companies to   

A. Register with the PCAOB (Public Company Accounting Oversight Board).

 

B. Send their financial statements directly to investors, creditors, and other users of financial information.

 

C. Maintain an internal audit function.

 

D. Use IFRS (International Financial Reporting Standards) for financial statement reporting purposes.

 

 

 

 

35.Which of the following is not a basic function of an accounting system?   

A. To interpret and record the effects of business transactions.

 

B. To classify the effects of similar transactions in a manner that permits determination of various totals and subtotals useful to management.

 

C. To ensure that a business organization will be managed profitably.

 

D. To summarize and communicate information to decision makers.

 

 

 

 

36.Information is cost effective when:   

A. The information aids management in controlling costs.

 

B. The information is based upon historical costs, rather than upon estimated market values.

 

C. The value of the information exceeds the cost of producing it.

 

D. The information is generated by a computer based accounting system.

 

 

 

 

37.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.