Exam (elaborations)
Test Bank for Fundamental Accounting Principles, 24th edition by John Wild.
Test Bank for Fundamental Accounting Principles, 24th edition by John Wild.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Content preview
Fundamental Accounting Principles, 24e (Wild)Chapter 1 Accounting in Business
1) Accounting is an information and measurement system that identifies, records, and
communicates an organization's business activities.
Answer: TRUE
Difficulty: 1 Easy
Topic: Importance of Accounting
Learning Objective: 01-C1 Explain the purpose and importance of accounting.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Critical Thinking; FN Decision Making
2) Recordkeeping, or bookkeeping, is the recording of transactions and events, either manually
or electronically. This is just one part of accounting.
Answer: TRUE
Difficulty: 1 Easy
Topic: Importance of Accounting
Learning Objective: 01-C1 Explain the purpose and importance of accounting.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Critical Thinking; FN Decision Making
3) An accounting system captures relevant data about transactions and then classifies, records,
and reports data.
Answer: TRUE
Difficulty: 1 Easy
Topic: Importance of Accounting
Learning Objective: 01-C1 Explain the purpose and importance of accounting.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Critical Thinking; FN Decision Making
4) Financial accounting is the area of accounting aimed at serving external users by providing
them with general-purpose financial statements.
Answer: TRUE
Difficulty: 1 Easy
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Critical Thinking; FN Decision Making
,5) Internal users of accounting information do not directly run the organization and have limited
access to its accounting information.
Answer: FALSE
Difficulty: 1 Easy
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Critical Thinking; FN Decision Making
6) Auditors verify the effectiveness of internal controls.
Answer: TRUE
Difficulty: 1 Easy
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Critical Thinking; FN Decision Making
7) External auditors examine financial statements to verify that they are prepared according to
generally accepted accounting principles.
Answer: TRUE
Difficulty: 1 Easy
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Critical Thinking; FN Decision Making
8) External users include lenders, shareholders, customers, and regulators.
Answer: TRUE
Difficulty: 2 Medium
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Understand
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Critical Thinking; FN Decision Making
,9) Regulators often have legal authority over certain activities of organizations.
Answer: TRUE
Difficulty: 1 Easy
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Legal; FN Decision Making
10) Internal users include lenders, shareholders, brokers and nonexecutive employees.
Answer: FALSE
Difficulty: 2 Medium
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Understand
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Industry; FN Decision Making
11) Opportunities in accounting include auditing, consulting, market research, and tax planning.
Answer: TRUE
Difficulty: 2 Medium
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Understand
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Industry; FN Decision Making
12) Ethics is defined as maximizing personal wealth, regardless the cost.
Answer: FALSE
Difficulty: 2 Medium
Topic: Ethics
Learning Objective: 01-C3 Explain why ethics are crucial to accounting.
Bloom's: Understand
AACSB/Accessibility: Ethics / Keyboard Navigation
AICPA: BB Industry; FN Decision Making
, 13) The Sarbanes-Oxley Act (SOX) requires documentation and verification of internal controls.
It also emphasizes effective internal controls.
Answer: TRUE
Difficulty: 1 Easy
Topic: Ethics
Learning Objective: 01-C3 Explain why ethics are crucial to accounting.
Bloom's: Remember
AACSB/Accessibility: Ethics / Keyboard Navigation
AICPA: BB Legal; FN Reporting
14) The fraud triangle asserts that the three factors that must exist for a person to commit fraud
are opportunity, pressure, and rationalization.
Answer: TRUE
Difficulty: 2 Medium
Topic: Ethics
Learning Objective: 01-C3 Explain why ethics are crucial to accounting.
Bloom's: Understand
AACSB/Accessibility: Ethics / Keyboard Navigation
AICPA: BB Industry; BB Legal; FN Decision Making
15) Management is not responsible for implementing internal controls and does not need to issue
a report on internal controls.
Answer: FALSE
Difficulty: 2 Medium
Topic: Generally Accepted Accounting Principles
Learning Objective: 01-C4 Explain generally accepted accounting principles and define and
apply several accounting principles.
Bloom's: Understand
AACSB/Accessibility: Ethics / Keyboard Navigation
AICPA: BB Legal; FN Reporting
16) A partnership is a business owned by two or more people.
Answer: TRUE
Difficulty: 1 Easy
Topic: Generally Accepted Accounting Principles
Learning Objective: 01-C4 Explain generally accepted accounting principles and define and
apply several accounting principles.
Bloom's: Remember
AACSB/Accessibility: Communication / Keyboard Navigation
AICPA: BB Legal; FN Decision Making
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller StudyNest. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $19.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83507 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now