Accounting I

A corporation is: a. A business legally separate from its owners. b. Controlled by the FASB. c. Not responsible for its own acts and own debts. d. The same as a limited liability partnership. e. Not subject to double taxation.

a. A business legally separate from its owners.

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the: a. Going-concern assumption. b. Business entity assumption. c. Objectivity principle. d. Cost Principle. e. Monetary unit assumption.

a. Going-concern assumption.

The question of when revenue should be recognized on the income statement according to GAAP is addressed by the: a. Revenue recognition principle. b. Going-concern assumption. c. Objectivity principle. d. Business entity assumption. e. Cost principle.

a. Revenue recognition principle.

The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the: a. Time-period assumption. b. Business entity assumption. c. Going-concern assumption. d. Revenue recognition principle. e. Cost principle.

b. Business entity assumption.

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the: a. Accounting equation. b. Cost principle. c. Going-concern assumption. d. Realization principle. e. Business entity assumption.

b. Cost principle.

The private-sector group that currently has the authority to establish generally accepted accounting principles in the United States is the: a. APB. b. FASB. c. AAA. d. AICPA. e. SEC.

b. FASB.

The independent group that is attempting to harmonize accounting practices of different countries is the: a. AICPA. b. IASB. c. CAP. d. SEC. e. FASB.

b. IASB.

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. Bookkeeping.

b. Managerial Accounting

The rule that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash, and (3) measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services, is called the: a. Going-concern assumption. b. Cost principle. c. Revenue recognition principle. d. Objectivity principle. e. Business entity assumption.

c. Revenue recognition principle.

All of the following regarding a Certified Public Accountant are true except: a. Must meet education and experience requirements. b. Must pass an examination. c. Must exhibit ethical character. d. May also be a Certified Management Accountant. e. Cannot hold any certificate other than a CPA.

e. Cannot hold any certificate other than a CPA.

The accounting concept that requires financial statement information to be supported by independent, unbiased evidence is: a. Business entity assumption. b. Revenue recognition principle. c. Going-concern assumption. d. Time-period assumption. e. Objectivity principle.

e. Objectivity principle.