ACC 7080 - Mr. Turner

Prior to the establishment of the FASB, which organization had primary responsibility for promulgating accounting standards?

AICPA

Which organization is responsible for preparing and grading the CPA exam?

AICPA

Which of the following is not generally a responsibility of an accounting faculty member?

Auditing the university where he/she is employed

Identify 1 of the 3 corporate officers who is required to personally sign the Form 10-K that a public company files with the SEC.

CAO CEO CFO

The statement of financial position and the income statement are one and the same.

False

True or false: All types of organizations need the same type of accounting information.

False

Which of the following organizations is viewed as the auditor of the government?

GAO (government accountability office)

What are the requirements for becoming licensed as a CPA (in most states)?

Have accounting experience Have completed 150 semester hours of college with a major in accounting Be of good character Pass the uniform CPA examination

Which of the following differentiates between a bookkeeper and an accountant?

Interpreting information and making judgments Using accounting information as a member of upper management

Which of the following characteristics describe the Securities and Exchange Commission (SEC)? a) It reviews the financial statements of public companies for compliance with GAAP. b) It works closely with the FASB in establishing GAAP. c) It lacks the legal power to enforce its rules and decisions. d) It is a private-sector entity rather than a public-sector or governmental entity.

It reviews the financial statements of public companies for compliance with GAAP. It works closely with the FASB in establishing GAAP.

Which of the following are characteristics of management accounting information?

Needs to be provided to those with decision-making authority Needs to be timely

Which of the following are characteristic of starting one's accounting career in public accounting?

Preparation for future position in management Serves as a stepping stone for future accounting positions Opportunity to see inside many different businesses

Financial statements are designed primarily to:

Provide people outside the business organization with information about the company's financial position and operating results.

The basic purpose of audited financial statements is to:

Provide users of the financial statements with assurance that the statements are verifiable and are presented in conformity with generally accepted accounting principles.

Which of the following organizations is viewed as the watchdog of financial reporting?

SEC

Which of the following correctly describe accounting systems?

Should be cost effective May produce information required by law or contract Technology has greatly increased cost effectiveness of accounting systems Reason: Computer-based systems have increased the cost effectiveness of accounting systems

Which of the following is not an important factor in ensuring the integrity of accounting information?

The cost of preparing the financial information.

Information is cost-effective when:

The value of the information exceeds the cost of producing it.

What characterizes accounting principles?

They require authoritative support.

Information that has the characteristic of integrity has which of the following characteristics? a) Complete b) Sound c) Honest d) Favors one outcome over another

a) Complete b) Sound c) Honest

Which of the following characteristics describe the Financial Accounting Standards Board (FASB)? a) It compiles its standards in the Accounting Standards Codification. b) It is a government entity rather than a private-sector entity. c) It consists of 5 members with varied backgrounds. d) It is primarily responsible for promulgating GAAP.

a) It compiles its standards in the Accounting Standards Codification. d) It is primarily responsible for promulgating GAAP.

The term financial position is used to describe

an entity's financial resources and obligations.

The CPA designation is granted by

an individual state.

Which of the following are reliable sources of financial information for investors and creditors? a) Unfamiliar internet resources b) Press releases directly from companies c) Daily publications, such as the Wall Street Journal d) Financial statements of companies

b) Press releases directly from companies c) Daily publications, such as the Wall Street Journal d) Financial statements of companies

Which of the following is a characteristic of accounting information with integrity? a) impaired b) complete c) timely d) cost-beneficial

b) complete

The _______ ______ is a financial position statement that shows where the company stands in the financial terms at a specific date.

balance sheet

Which groups are charged with developing and monitoring internal control?

board of directors management

GAAP includes

broad principles of presentation. broad principles of measurement.

Which of the following is a user of internal accounting information? a) government regulators b) customers c) store managers d) chief executive officer

c) store managers d) chief executive officer

The statement of _____ _____ is a(n) activity statement

cash flows

Internal control is a process designed to provide reasonable assurance that the organization

conducts its operations in an efficient and effective manner. produces reliable financial reports. complies with applicable laws and regulations. Reason: Management has a primary responsibility to a company's owners (shareholders)

Which of the following is not an internal user of accounting information? a) line supervisor b) business unit managers c) chief financial officer d) investors

d) investors

One objective of an accounting system is to communicate accounting information to the _________ makers

decision

Accounting information measures the _____ and ______ of resource usage.

efficiency effectiveness

A management accounting information system is useful in

evaluating and rewarding decision-making performance. providing a signal as to employee performance.

An audit is a(n) ______ of a company's financial statements, designed to determine the fairness of the statements.

examination, evaluation, investigation, inspection, or review

Based on the AICPA's code of professional conduct, a member in public practice should be independent in _____ and in ______.

fact appearance

The fairness of financial statements is judged in accordance with

generally accepted accounting principles.

The general-purpose financial statements prepared annually by a corporation would not include the:

income tax return

Identify the characteristics of externally reported information.

inexact and approximate measures usefulness enhanced via explanation

In a large business, which individuals are responsible for designing and improving the accounting system?

internal auditors system analysts

A basic function of an accounting system is to _____ and _____ the effects of business transactions.

interpret record

Whereas bookkeeping is largely clerical in nature, professional accountants are more involved with the _____ and ____ of accounting information.

interpretation use or usage

Which of the following is a characteristic of financial accounting information?

its preparation requires judgment.

Which of the following describes typical activities performed by a public accountant?

management advisory services auditing financial statements income tax work

Which factors determine an organization's need for information?

management needs the size of the organization whether the organization is public or private

At any point in time, a management accountant typically works for _____ organizations

one or single

The AICPA's code of professional conduct calls for an unswerving commitment to honorable behavior, even at the sacrifice of _____ _____

personal advantage

Which entry-level job is often viewed as providing the best "stepping-stone" experience?

public accounting

It is particularly important for marketing, management, and other business student to understand accounting principles related to

revenue recognition.

Which of the following are most likely to use standardized packaged accounting systems?

small businesses with limited resources Reason: Most often they would develop specialized systems internally

A position as an accounting faculty member generally involves which of the following?

teaching research consulting

The AICPA's code of professional conduct indicates that CPAs have responsibilities to

the public

In a cost-effective accounting information system, ______.

the value of the information produced should exceed the cost of producing it

Individuals who move from public accounting firms into corporations often have which jobs?

treasurer chief financial officer controller