Accounting
Fayette Company includes in its accounting records only transaction data that can be expressed in terms of money.
Correct -- Monetary unit assumption
Congress passed the Sarbanes-Oxley Act to ensure that investors invest only in companies that will be profitable.
False
Managerial accounting provides reports to help investors and creditors evaluate a company.
False
The economic entity assumption applies to corporations but not proprietorships or partnerships. (T/F?)
False
The primary accounting standard-setting body in the United States is the Securities and Exchange Commission (SEC).
False
The standards of conduct by which actions are judged as loyal or disloyal are ethics.
False
The standards developed by the International Accounting Standards Board are referred to as International Financial Recording Standards.
False - International Financial Reporting Standards.
Large international public companies are required to comply with Sarbanes-Oxley.
False - not required
U.S. standards are referred to as
GAAP
GAAP stands for
Generally Accepted Accounting Principles
International standards are referred to as
IFRS
Tina Company owns buildings that are worth substantially more than they originally cost. In an effort to provide more relevant information, Tina reports the buildings at fair value in its accounting reports.
Incorrect -- Cost Principle
Omar Shariff, president of Omar's Oasis, records his personal living costs as expenses of Oasis.
Incorrect -- Economic entity assumption
Internal users include human resources managers.
True
The accounting process includes the bookkeeping function
True
The historical cost principle dictates that companies record assets at their cost and continue to report them at their cost over the time the asset is held.
True
The monetary unit assumption requires that companies record only transactions that can be measured in money terms.
True
The three most common forms of business organization, proprietorship, partnership, and corporation, are used in countries that use IFRS.
True
The historical cost principle states that
assets should be recorded at their cost
In order to increase comparability, in recent years, the FASB and IASB have made efforts to reduce the differences between U.S.GAAP and IFRS through a process known as
convergence
Ethics are the standards of conduct by which one's actions are judged as
honest or dishonest, right or wrong, and fair or unfair
The three steps in the accounting process are
identification, recording, and examination
The United States and the international standard-setting environment are primarily driven by meeting the needs of
investors and creditors
The two most common types of external users are
investors and creditors
The three types of business entities are
proprietorships, partnerships, and corporations
The intent of the Sarbanes Oxley Act of 2002 is to
reduce unethical corporate behavior, decrease likelihood of future corporate scandals, and increase severity of penalties for fraudulent financial activity.
Generally Accepted Accounting Principles are
standards that indicate how to report economic events
Accountants refer to an economic event that affects a company's financial statements as a
transaction