51. The primary objective of financial accounting is: 

A. To serve the decision-making needs of internal users.

B. To provide financial statements to help external users analyze and interpret an organization's activities.

C. To monitor and control company activities.

D. To provide information on both the costs and benefits of managing products and services.

E. To know what, when and how much to produce.

 

 

52. Internal users of accounting information always include: 

A. Shareholders

B. Managers

C. Lenders

D. Suppliers

E. Customers

 

 

53. The area of accounting aimed at serving the decision-making needs of internal users is: 

A. Financial accounting

B. Managerial accounting

C. External auditing

D. SEC reporting

E. Governmental accounting

 

 

54. Why are ethics crucial to accounting?

A. Ethical behavior creates the most profit for the business.

B. Ethics are a tool which help the accountants balance the accounting equation.

C. For accounting information to be useful, it must be trusted and therefore the result of ethical decisions.

D. Ethics are important to consider when applying GAAP but do not apply to international accounting issues.

E. Ethics are a way to compute revenues and expenses, but they do not apply to assets, liabilities, and owners’ equity.

 

 

55. What is the opportunity component of the fraud triangle?

A. A person thinks that there is a way to commit fraud without much chance of getting caught.

B. A person has a really good reason to commit fraud.

C. A person does not think of the fraudulent activity as bad.

D. A person persuades two or more other people to assist with the fraud.

E. A person is concerned about the impact of their actions on society.

 

56. Which accounting assumption assumes that all accounting information can be reported monthly or yearly?

A. Business entity assumption

B. Monetary unit assumption

C. Value assumption

D. Cost assumption

E. Time period assumption

 

 

57. Which of the following accounting principles dictates when expenses are recognized? 

A. Revenue recognition principle

B. Monetary unit principle

C. Business entity principle

D. Matching principle

E. Full disclosure principle

 

 

58. Which of the following is the correct sequence for the heading for ABC Company’s 2013 balance sheet?  

A. ABC Company, For the year ended 12/31/13, Balance Sheet

B. For the year ended 12/31/13, Balance Sheet, ABC Company

C. Balance Sheet, 12/31/13, ABC Company

D. 12/31/13, ABC Company, Balance Sheet

E. ABC Company, Balance Sheet, 12/31/13

 

 

59. Which of the following elements are found on the income statement? 

A. Cash

B. Accounts receivable

C. Common stock

D. Retained earnings

E. Salaries expense

 

 

60. An asset is:

A. Only acquired with cash.

B.  Something the company owns.

C. Only contributed by stockholders.

D.  A company’s obligation to pay.

E. Is also called contributed capital.