Question Details

ACCTG 1A WEEK 1 QUIZ 					

		Indicate the best answer for each question in the space provided.

		1	The best definition of an accounting system is:
			a	Journals, ledgers, and worksheets.
			b	Manual or computer-based records used in developing information about an entity for use by managers and also persons outside the organization.
			c	The personnel, procedures, devices, and records used by an entity to develop accounting information and communicate this information to decision makers.
			d	The concepts, principles, and standards specifying the information which should be included in financial statements, and how that information should be presented.

		2	Suppose a number of your friends have organized a company to develop and sell a new software product.  They have asked you to loan them $7,000 to help get the company started, and have promised to repay your $7,000 plus 10% interest in one year.  Of the following, which amount may be described as the return on your investment?
			a	$7,000.
			b	$   700.
			c	$7,700.
			d	Some other amount.

		3	Which of the following is generally not considered one of the general purpose financial statements issued by a corporation?
			a	Income statement forecast for the coming year.
			b	Balance sheet.
			c	Statement of financial position.
			d	Statement of cash flows.

		4	All of the following are characteristics of management accounting, except:
			a	Reports are used primarily by insiders rather than by persons outside of the business entity.
			b	Its purpose is to assist managers in planning and controlling business operations.
			c	Information must be developed in conformity with generally accepted accounting principles or with income tax regulations.
			d	Information may be tailored to assist in specific management decisions.

		5	Which of the following is not an objective of financial reporting?
			a	Provide information useful in assessing amount, timing, and uncertainty of future cash flows.
			b	Provide information useful in making investment and credit decisions.
			c	Provide information about economic resources, claims to resources, and changes in resources and claims.
			d	Provide information to guarantee the enterprise achieves its goals, objectives, and mission.

 
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10-MINUTE QUIZ B	SECTION						


Match the organizations on the left with the descriptions on the right.  Each description should be used only once.

	Organization		Description

	 Financial Accounting Standards Board		a.	Government agency that regulates
						financial reporting by publicly-
						held companies.

	 Securities and Exchange Commission		b.	International organization dedicated
						to the advancement of internal
						auditing.

	 American Accounting Association		c.	Private organization most directly
						involved in the development and
						issuance of accounting standards.

	 Institute of Internal Auditors	d.	Organization dedicated to the 
					advancement of accounting education
					and research.

	 American Institute of CPAs		e	Organization most involved with the
						ethical conduct of the accountants
						working within a company.

	 Institute of Management Accountants		f.	Organization which develops formal
						standards for auditing in the 
						United States.

	 Internal Revenue Service		g.	A government agency that handles
						income tax returns of individuals and  
					businesses and performs an audit 
					function [to] verify the data presented.

	 International Accounting 		h.	An organization which develops
	 Standards Board			international accounting
					standards.
					

_______Committee of Sponsoring Organizations. 	i     An organization dedicated to improving                                                                        financial reporting through ethics, internal controls, and corporate governance.

 
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10-MINUTE QUIZ C	SECTION 						


The following is a list of various characteristics of accounting information.  In the space provided identify each as a characteristic of either financial or management accounting information.


1.	The information is summarized in a set of statements distributed to the public.

			


2.	The information is historical in nature. It reports the results of events and transactions that have already occurred.

			


3.	The timeliness of the information is more critical than its completeness.

			


4.	To increase its usefulness to investors and creditors, the information is usually accompanied by explanations from management.

			

5.	The information is intended to be used for planning and control decisions.

		



 
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10-MINUTE QUIZ D	SECTION 						

Provide concise written answers to the following:

1.	Investors and creditors are interested in a company- “cash flow prospects.”  What two specific concerns of investors and creditors are summarized by the term “cash flow prospects?”






2.	List three financial statements that are used to communicate financial accounting information to interested external parties.






3.	Provide a brief example to illustrate that externally reported financial accounting information must be based in part on estimates, judgments, and assumptions.











4.	Briefly explain how generally accepted accounting principles enhance the integrity of financial accounting information.