Accounting In Business

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Accounting in Business
Analyzing for Business Transactions

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Question 1

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Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.

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Question 2

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Bookkeeping is the recording of transactions and events and is only part of accounting.

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Question 3

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An accounting information system communicates data to help users make better decisions.

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Question 4

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Financial accounting is the area of accounting that provides internal reports to assist the decision making needs of internal users.

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Question 5

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Internal operating activities include research and development, distribution, and human resources.

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Question 6

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The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

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Question 7

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External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles.

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Question 8

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External users include lenders, shareholders, customers, and regulators.

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Question 9

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Regulators often have legal authority over certain activities of organizations.

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Question 10

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Internal users include lenders, shareholders, brokers and managers.

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Question 11

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Opportunities in accounting include auditing, consulting, market research, and tax planning.

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Question 12

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Identifying the proper ethical path is usually easy.

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Question 13

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The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

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Question 14

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The fraud triangle asserts that the three factors that must exist for a person to commit fraud are opportunity, pressure, and rationalization.

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Question 15

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The Sarbanes-Oxley Act (SOX) does not require public companies to apply both accounting oversight and stringent internal controls.

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Question 16

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A partnership is a business owned by two or more people.

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Question 17

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Owners of a corporation are called shareholders or stockholders.

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Question 18

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In the partnership form of business, the owners are called stockholders.

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Question 19

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The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

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Question 20

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The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.

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