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Test Bank for Horngren's Financial & Managerial Accounting, The Financial Chapters, 8th Edition by Tracie Miller-Nobles || All Chapters ( 1-13 ) ||Updated 2024 A+$12.99
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Test Bank for Horngren's Financial & Managerial Accounting, The Financial Chapters, 8th Edition by Tracie Miller-Nobles || All Chapters ( 1-13 ) ||Updated 2024 A+
Test Bank for Horngren's Financial & Managerial Accounting, The Financial Chapters, 8th Edition by Tracie Miller-Nobles || All Chapters ( 1-13 ) ||Updated 2024 A+
Test Bank for Horngren's Financial & Managerial Accounting, The Financial
Chapters, 8th Edition by Tracie Miller-Nobles - All Chapters ( 1-13 ) A+
Chapter F:1 Accounting and the Business Environment
Learning Objective F:1-1
1) Accounting is the information system that measures business activities, processes the
information into reports, and communicates the results to decision makers.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Why Is Accounting Important? (H1)
2) The knowledge of accounting is rarely used to help make business and personal financial
decisions.
Answer: FALSE
Explanation: The knowledge of accounting is used daily to assist in making decisions for both
businesses and personal items.
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Why Is Accounting Important? (H1)
3) Accounting starts with economic activities that accountants review and evaluate using critical
thinking and judgment to create useful information that helps individuals make good decisions.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Why Is Accounting Important? (H1)
Test bank A++
PAGE 1
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4) Accounting is referred to as the language of business because it is the method of
communicating
business information to decision makers.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Why Is Accounting Important? (H1)
5) A model called the ________ was created to help students and the public understand what
accounting is.
A) Decision Making Model
B) Business Model
C) Pathways Vision Model
D) Cost Model
Answer: C
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Why Is Accounting Important? (H1)
6) The Pathways Vision Model emphasizes that good decisions have an impact on
A) accounting judgments and economic activity.
B) accounting judgments only.
C) economic activity only.
D) neither accounting judgments nor economic activity.
Answer: A
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Why Is Accounting Important? (H1)
Test bank A++
PAGE 2
,Created By : TestsBanks
7) Managerial accounting focuses on providing information for external decision makers.
Answer: FALSE
Explanation: Managerial accounting focuses on providing information for internal decision
makers.
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Decision Makers: The Users of Accounting Information
8) Investors primarily use managerial accounting information for decision-making purposes.
Answer: FALSE
Explanation: External users (investors) use financial accounting information.
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Decision Makers: The Users of Accounting Information
9) A creditor is a person who owes money to the business.
Answer: FALSE
Explanation: A creditor is a person to whom a business owes money.
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Decision Makers: The Users of Accounting Information
10) Income tax is calculated using accounting information.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Decision Makers: The Users of Accounting Information
Test bank A++
PAGE 3
, Created By : TestsBanks
11) Financial accounting focuses on information for decision makers outside of the business,
such as creditors and taxing authorities.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Decision Makers: The Users of Accounting Information
12) Business owners use accounting information to set goals, evaluate progress toward those
goals, and
make adjustments when needed.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Decision Makers: The Users of Accounting Information
13) Outside investors ordinarily use financial accounting information to decide whether or not to
invest in a business.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2: Decision Makers: The Users of Accounting Information
14) A creditor is any person who has an ownership interest in a business.
Answer: FALSE
Explanation: A creditor is any person to whom money is owed.
Diff: 1
LO: F:1-1
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Concept
Test bank A++
PAGE 4
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