chapter 1 accounting
the sarbanes-oxley act includes criminal penalties up to ___ years in prison for obstruction of justice
20
what governmental agencies hire accountants to audit their financial statements and uncover possible violations of the law?
IRS, FBI, SEC
corporation
an entity separate from its owners; the entity has an indefinite life
the review of financial statements to assess their fairness and adherence to generally accepted accounting principles is known as ____
auditing
a report that contains the auditor's opinion about the fair presentation of the operating results and financial position of a company is called a(n) ____ report.
auditor's
an accounting position that usually requires one or two years of accounting education plus experience as an accounting clerk is:
bookkeeper
all of the following are areas of accounting practice except: managerial governmental public bookkeeping
bookkeeping
Because accounting is used to communicate financial information, it is often called the "language of ____"
business
An accountant who has passed the uniform CPA examination and who has fulfilled the experience of the state of practice is known as a
certified public accountant
an accounting system is designed to do which of the following activities: classify the data in a meaningful way. accumulate data about a firm's financial activities. summarize info in financial statements. change data to increase profitability.
classify the data in a meaningful way. accumulate data abt a firms financial activities. summarize info in financial statements.
joan simmons opened a car wash. she elected a business entity that keeps the company legally separate from its owners, and has a legal right to own property and do business in its own name. the type of business entity that joan elected is known as a ____
corporation
the auditor's report confirms that the financial info is prepared in conformity with:
gaap
the accounting rules that must be followed by publicly owned companies are known as:
generally accepted accounting principles (gaap)
keeping financial records and preparing financial reports as part of the staff of federal, state, or local government units is known as ____ accounting.
governmental
an entity is recognized as having its own separate:
identity
as a business grows, the need for more financial information will
increase
____ accounting is the study of accounting principles used by different countries
international
tax accounting
involves compliance with internal revenue service (irs) and planning to reduce irs liabilities
management advisory services
involves helping clients improve their information systems or their business performance
auditing
involves the review of financial statements to assess their fairness and adherence to generally accepted financial statements
under some states, a special type of partnership can be formed that provides limited liability for all partners. under this type of partnership, partners have liability for their own actions and the actions of those under their control. this type of partnership is called a
limited liability partnership
sometimes referred to as private accounting, ____ accounting involves working for a single business or entity
managerial
to become a certified public accountant (cpa), an individual must meet the following requirements
obtain a certain number of college credits in accounting courses, demonstrate good personal character, pass the uniform cpa examination, and fulfill the experience requirements of the state of practice.
securities and exchange commission (sec)
oversees the financial information provided by publicly owned corporations
Identify the users of financial information
owners and managers suppliers banks tax authorities regulatory agencies and investors customers employees and unions
Some of the activities performed by managerial accountants includes: preparing tax forms providing external audits preparing internal reports preparing financial statements
preparing tax forms preparing internal reports preparing financial statements
one thing sarbanes-oxley act includes is
prohibits the destruction or creation of documents to impede a federal investigation
accounting clerk
responsible for record keeping for a part of the accounting system
book-keeper
responsible for recording business transactions
maira lopez owns a sole proprietorship. based on the ____ assumption, she does not use her business checking account to pay her own personal bills.
separate entity
the idea that a business entity should keep the entity's financial records separate from the owners personal financial records is known as the ____ assumption
separate entity
a non-profit organization, such as city, public school, or public hospital, is known as a(n) ____ entity.
social
corporations issue certificates that represent the ownership of a corporation. these certificates are called___
stock certificates
a ____ is an owner of a corporation
stockholder or shareholder
the owners of a corporation are called
stockholders
accountant
supervise other accounting positions and prepare financial statements
tax accounting involves which of the following activities (select all that apply): tax compliance tax payment tax planning
tax compliance and tax planning
generally accepted accounting principles (gaap)
these principles are developed by the financial accounting standards board. a corporation may choose to not follow a principle if doing so may produce info which is misleading.
true or false: the results of the accounting process is communicated to the users of accounting information
true
a(n) ____ has similar characteristics, advantages, and disadvantages as any other partnerships
LLP
the ____ is responsible for reviewing the accounting methods used by publicly owned corporations
SEC
the ___ is responsible for reviewing the accounting methods used by publicly owned operations
SEC or securities and exchange commission
the process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated to interested parties is known as
accounting
in 2009, the fasb created a new update, called the ____. this system converted gaap pronouncements into approximately 90 accounting topics that provide guidance to accounting professionals
accounting standards codification
A system that is designed to accumulate data about the firm's financial activities, classify the data in a meaningful way, and summarise it in periodic table reports called financial statements is called an ____ system
accounting system
it is important to recognize that a business is a(n) _____, meaning it has its own separate identity.
entity
partnership
entity owned by 2 or more people; the life of the business ends when one of the owners leaves
sole proprietorship
entity owned by one person; the life of the business ends when the owner no longer keeps the business going
which of the following activities are the responsibility of the accountant: is responsible for a part of the accounting system, such as accounts receivable. establishes the records and procedures that make up the accounting system. supervises the operation of the system.
establishes the records and procedures tht make up the accounting system. supervises the operation of the system.
financial accounting standards board (FASB)
explains the basis for the board's decision details specific amendments to the FASBA codification summarizes key provisions of the project