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