Accounting quiz 1 (chapter 1)

Since financial information is communicated in accounting terms and is the eyes and ears of management, accounting is said to be

The language of business

A system of gathering financial information about a business and reporting this information to users.

Accounting

A person who records, sorts, and files accounting information in accounting records may be referred to as an

Accounting clerk

Specializes in cash, payroll, accounts receivable, accounts payable, inventory, or purchases

Accounting clerk

Reviewing and testing to be certain that proper accounting policies and practices have been followed

Auditing

Sorting and grouping similar items together rather than merely keeping a simple, diary-like record of numerous events

Classifying

The principal accounting officer of a company is called a public accountant

False

Writing or using one of the latest technological advances to enter a transaction in the accounting records is called summarizing.

False

cost accounting is used to develop a financial plan for a company

False

A CMA is a Certified Marketing Auditor

False (Certified Management Accountant)

Includes preparing various reports and financial statement and analyzing operating, investing, and financing decisions.

Financial accounting

Includes preparing various reports and financial statements and analyzing operating, investing, and financing decisions

Financial accounting

Reviewing the operating and accounting control procedures adopted by management to make sure the controls are adequate and being followed; assuring that accurate and timely information is provided

Internal auditing

A business that makes products to sell

Manufacturing business

A business that buys a product from another business to sell to customers

Merchandising business

A business that purchases a product from another business to sell to customers is called a

Merchandising business

A type of ownership structure in which more than one person owns the business

Partnership

A corporation is usually managed by

Professional managers

Which of the following does NOT use nonprofit accounting guidelines and procedures?

Proprietorship

Entering financial information about events affecting the company into the accounting system

Recording

Telling the results of the financial information

Reporting

Public accountants do NOT offer which of the following services?

marketing analysis

Examining a transaction or event to determine its fundamental significance to the business so that the relevant information may be properly processed is called

Analyzing

Looking at the events that have taken place and thinking about how they affect the business

Analyzing

Cost accountants provide a wide variety of services including

Analyzing the cost effectiveness of products produced and services provided

Generally supervises the work of accounting clerks, helps with failing accounting work, and summarizes accounting information

Bookkeeper

The process in which accountants help managers develop a financial plan

Budgeting

is the process by which accountants help managers develop a financial plan

Budgeting

A type of ownership structure in which there are many owners who actually employ professional managers

Corporation

A partnership is owned by stockholders or shareholders and is managed by them

False

A person who reviews the operating and accounting controls procedures adopted by management to make sure the controls are adequate and are being followed may be referred to as an

Internal auditor

Deciding the meaning and importance of the information in various reports

Interpreting

is deciding the meaning and importance in various reports, which may include ratio analysis to help explain how pieces of information relate to one another

Interpreting

is owned by two or more people who assume the risks for the business and whose assets may be taken to pay creditors

Partnership

A business that provides a service

Service business

The owners of a corporation are called

Shareholders or stockholders

A type of ownership structure in which one person owns the business

Sole proprietorship

Bringing various items of information together to determine a result

Summarizing

A business that makes a product to sell is called a manufacturing business

True

A public accountant can achieve professional recognition as a Certified Public Accountant by meeting certain educational and experience requirements as determined by each state

True

Accountants design accounting information systems and analyze and interpret information.

True

Generally accepted accounting principles are procedures and guidelines to be followed in the accounting/reporting process

True

Since financial information is communicated in accounting terms, accounting is said to be the "language of business"

True

The Financial Accounting Board develops generally accepted accounting principles to provide some assurance that companies are reporting business activities in a similar manner

True

The purpose of accounting is to provide financial information about the current operations and financial conditions of a business to individuals and organizations

True

The six major steps of the accounting process are analyzing, recording, classifying, summarizing, reporting, and interpreting

True

Determining the cost of producing specific products or providing services and analyzing for cost effectiveness

Cost accounting

The rules that businesses must follow when preparing financial statements

Generally accepted accounting principles

The accounting function of classifying is

Sorting and grouping similar items together

Focusing on tax planning, preparing tax returns, and dealing with the Internal Revenue Service and other governments, agencies

Tax accounting