Williams: Financial and Managerial Accounting Chapter 1 SmartBook

  1. Which of the following items are accounting measurements?
    • -costs
    • -sales volume
    • -profits
  2. True or false: Accounting information is only relevant to businesses.
  3. Accounting information
    provides useful information.
  4. The three types of accounting information used in the business community include all of the following except?
  5. The term financial position is used to describe
    an entity's financial resources and obligations.
  6. True/False: Investors and creditors are examples of individuals with a financial interest in a company that benefit from an understanding of accounting measurements.
  7. Financial accounting information is primarily designed to benefit which group?
  8. Organizations or individuals that are primary users of accounting information of a company include (Multiple Choice Answer)
    1. Governmental agencies

    2. Business organizations

    3. Nonprofit organizations
  9. True or false: The purpose of management accounting information is to help in running the business.
  10. In the Pathways Commission's model of accounting, which of the following best describes the role of accounting information?
    provides useful information for decisions
  11. Which of the following are types of accounting information widely used in the business community? (Select all that apply).
    1. Tax accounting

    2. Financial accounting

    3. Management accounting
  12. The financial position of an entity is measured at a point in 
  13. Which of the following best describes tax information in comparison with other types of accounting information?
    Tax information is specialized information that is based on legal requirements.
  14. financial accounting information is used for so many different purposes that it is often referred to as "____-____" accounting information
  15. the basic purpose of an accounting system is
    to meet the organization's information needs
  16. Which group is the primary user of management accounting information?
  17. In the Pathways Commission's model of accounting, accounting judgments are an input to
    providing useful information.
  18. Which factors determine an organization's need for information?
    1. management needs

    2. the size of the organization

    3. whether the organization is public or private
  19. The three types of accounting information used in the business community include all of the following except?
  20. Which of the following correctly describe accounting systems? (Select all that apply).
    1. Must produce information required by law or contract

    2. Should be cost effective

    3. Technology has greatly increased cost effectiveness of accounting systems
  21. Laws and regulations governing taxation: (Select all that apply).
    1. are different from those underlying management accounting information.

    2. are different from those underlying financial accounting information.
  22. One objective of an accounting information system is to communicate accounting information to the " " makers.
  23. Which of the following are basic functions performed by an accounting system? (Select all that apply).
    • - summarize
    • - record
    • - interpret
    • - classify
    • - communicate
  24. True or false: The purpose of management accounting information is to help in running the business.
  25. Which of the following are most likely to use standardized packaged accounting systems?
    small businesses with limited resources
  26. True or false: All types of organizations need the same type of accounting information.
  27. Internal control is a process designed to provide reasonable assurance that the organization ___. (Select all that apply).
    1. conducts its operations in an efficient manner

    2. complies with applicable laws and regulations

    3. produces reliable financial reports
  28. In a cost-effective accounting information system, ______.
    the value of the information produced should exceed the cost of producing it
  29. Identify the elements of Internal Control—Integrated Framework. (Select all that apply).
    1. control activities

    2. risk assessment

    3. monitoring activities

    4. control environment

    5. information and communication
  30. compared to financial and management accounting information, tax information results from a different system and complies with specialized _____ _____ that relate to a company/s responsibility to pay an appropriate amount of taxes
    legal requirements
  31. Factors that affect an organization's control environment include: (Select all that apply).
    1. organizational commitment to integrity and ethical values.

    2. organizational commitment to attract, develop, and retain competent individuals.

    3. independence of the board of directors.
  32. a basic function of an accounting system is to ____ and ____ the effects of business transactions
    interpret; record
  33. Risk assessment involves ___, ___, and ___ those risks that pose a threat to the achievement of the organization's objectives.
    • Blank 1: identifying
    • Blank 2: analyzing
    • Blank 3: managing
  34. In a large business, which individuals are responsible for designing and improving the accounting information system?
    1. internal auditors

    2. systems analysts
  35. Which groups are charged with developing and monitoring internal control? (Select all that apply).
    1. management

    2. board of directors
  36. How many components of internal control are included in the Internal Control--Integrated Framework 2013?
  37. Fraudulent financial reporting is most likely to occur due to weaknesses in which element of internal control?
    control environment
  38. Risk assessment involves which of the following? (Select all that apply).
    - Identifying risks

    - Managing risks

    - Analyzing risks
  39. Examples of control activities are: (Select all that apply).
    1. segregation of duties.

    2. approvals.

    3. reconciliations.
  40. effective information systems capture both ____ and ____ information
    internal; external
  41. True or false: Segregation of duties is an important element of control activities.
  42. Monitoring activities are accomplished through: (Select all that apply.)
    • - the evaluation of the effectiveness of its internal control system
    • - ongoing management and supervisory activities
    • - periodic separate evaluations of internal control
  43. The Sarbanes-Oxley Act's requirement for external auditor reporting on internal control is contained in Section ___ of the Act.
    Blank 1: 404
  44. An effective information system is designed to communicate information: (Select all that apply).
    1. upstream, such as employee to management.

    2. across the organization.

    3. downstream, such as management to employee.
  45. Individuals and other enterprises that have a financial interest in the reporting enterprise but that are not involved in the day-to-day operations of that enterprise are ___ users.
    Blank 1: external
  46. An organization's control environment is the ___ for all of the other elements of internal control.
    Blank 1: foundation or basis
  47. You loan Stuart $500,000 on 7-1-X7 at an interest rate of 4%. What is the amount he must repay one year later?
  48. True or false: Once an internal control system has been established, monitoring of that system is not required.
  49. The most general objective of external financial reporting is to provide information that is useful in making _____________________ and ________________ decisions
    • Blank 1: investment
    • Blank 2: credit
  50. The Sarbanes-Oxley Act's requirement for external auditor reporting on internal control applies to
    all but the smallest public companies.
  51. The primary external users of accounting information include
  52. The income statement is an activity statement that shows details and results of the company's_____________-_____________activities for a period of time.
    • Blank 1: profit
    • Blank 2: related
  53. You loan Neal, Inc., $250,000 on 1-1-X8 for 1 year at an interest rate of 3%. Your total return on the investment of $250,000 at the end of 20X8 is
  54. Which are the primary objectives of external financial reporting? (Select all that apply).
    1. To provide information that is useful in assessing the amount, timing, and uncertainty of future cash flows

    2. To provide information about the enterprise's resources, claims to those resources, and how both of these change over time

    3. To provide information that is useful in making investment and credit decisions
  55. Which of the following are reliable sources of financial information for investors and creditors? (Select all that apply).
    - Financial statements of companies

    - Daily publications, such as the Wall Street Journal

    - Press releases directly from companies
  56. The statement of ___ ___  is a(n) activity statement.
    • Blank 1: cash
    • Blank 2: flows or flow
  57. Information in the primary financial statements is enhance by: (Select all that apply).
    1. explanations from management

    2. notes and explanations beyond the financial statements
  58. Which of the following is not an internal user of accounting information?
  59. Which corporate officers typically report to an organization's chief financial officer? (Select all that apply).
    1. treasurer

    2. controller
  60. The Sarbanes-Oxley Act was precipitated by financial frauds at which companies? (Select all that apply.)
    1. Enron

    2. WorldCom
  61. Identify the characteristics of externally reported information. (Select all that apply).
    1. inexact and approximate measures

    2. usefulness enhanced via explanation
  62. Reported financial information is accompanied by
    notes to the financial statements.
  63. Which of the following is a user of internal accounting information? (Select all that apply).
    1. store managers

    2. chief executive officer
  64. At what level in a company's organization chart would you expect to find the Chief Financial Officer (CFO)?
    Immediately below the Chief Executive Officer
  65. A management accounting information system is useful in: (Select all that apply).
    1. evaluating and rewarding decision-making performance.

    2. providing a signal as to employee performance.
  66. Which of the following are characteristics of management accounting information? (Select all that apply).
    1. Needs to be timely

    2. Needs to be provided to those with decision-making authority
  67. Which of the following is a characteristic of accounting information with integrity?
  68. GAAP stands for ___ ___ ___ ___
    • Blank 1: generally
    • Blank 2: accepted
    • Blank 3: accounting
    • Blank 4: principles
  69. Accounting principles continue to be developed in the private sector but are given the ____ ____ ____ because the SEC looks to the FASB to develop accounting standards in the United States
    force of law
  70. accounting information measures the ____ and ____ of resource usage
    efficiency; effectiveness
  71. The IASB issues which of the following?
    International Financial Reporting Standards
  72. Information that has the characteristic of integrity has which of the following characteristics?
    1. Sound

    2. Complete

    3. Honest
  73. What characterizes accounting principles?
    They require authoritative support.
  74. The PCAOB oversees
    auditors of public companies listed in the United States.
  75. an audit is a(n) ____ of a company's financial statements, designed to determine the fairness of the statements
    • Blank 1: independent
    • Blank 2: examination, evaluation, investigation, inspection, or review
  76. Which of the following characteristics describe the Securities and Exchange Commission (SEC)? (Select all that apply).
    1. It reviews the financial statements of public companies for compliance with GAAP.

    2. It works closely with the FASB in establishing GAAP.
  77. Prior to the establishment of the FASB, which organization had primary responsibility for promulgating accounting standards?
  78. The financial statements of private companies in the United States can be prepared using: (Select all that apply).
    1. IASB standards.

    2. FASB standards.
  79. Which power(s) does the PCAOB possess? (Select all that apply).
    1. To set auditing standards for public companies

    2. To inspect the quality of public-company audits

    3. To conduct investigations and administer penalties if substandard audit work is discovered
  80. The fairness of financial statements is judged in accordance with
    generally accepted accounting principles.
  81. Which organization is responsible for preparing and grading the CPA exam?
  82. Match the organization to the activity it performs.

    Sponsors the Certified Management Accountant (CMA) exam and program


    Issues the Standards for the Professional Practice of Internal Auditing


    Primarily focuses on improving accounting education


    Primarily focuses on enterprise risk management, internal control, and fraud deterrence
  83. What are the requirements for becoming licensed as a CPA (in most states)?
    Be of good character

    Have accounting experience

    Have completed 150 semester hours of college with a major in accounting

    Pass the uniform CPA examination
  84. The AICPA's code of professional conduct indicates that CPAs have responsibilities to
    the public.
  85. Which organization is responsible for issuing the internal control framework used in the United States for evaluating the effectiveness of an entity's internal control over financial reporting?
  86. The CPA designation is granted by
    an individual state.
  87. The AICPA's code of professional conduct calls for an unswerving commitment to honorable behavior, even at the sacrifice of ___ ___
    • Blank 1: personal
    • Blank 2: advantage, benefit, or reward
  88. Which characteristics define a profession? (Select all that apply).
    Serving the public interest

    A complex and evolving body of knowledge

    Professional judgment
  89. The PCAOB was created by which congressional act?
    Sarbanes-Oxley Act
  90. Which of the following describes typical activities performed by a public accountant? (Select all that apply).
    income tax work

    management advisory services

    auditing financial statements
  91. Identify 1 of the 3 corporate officers who is required to personally sign the Form 10-K that a public company files with the SEC.
    chief accounting officer
  92. Which of the following organizations is viewed as the watchdog of financial reporting?
  93. accounting affects the public's well-being in many ways because accounting information is used in the ____ of ____ ____ throughout society
    allocation; economic resources
  94. Individuals who move from public accounting firms into corporations often have which jobs?
    chief financial officer


  95. Which of the following is not generally a responsibility of an accounting faculty member?
    Auditing the university where he/she is employed
  96. At any point in time, a management accountant typically works for ___ organization(s).
    Blank 1: 1, one, or single
  97. whereas bookkeeping is largely clerical in nature, professional accountants are more involved with the ____ and ____ of accounting information
    • Blank 1: interpretation
    • Blank 2: use or usage
  98. Which of the following organizations is viewed as the auditor of the government?
  99. Which entry-level job is often viewed as providing the best "stepping-stone" experience?
    public accounting
  100. accounting is the ____ of business
    Blank 1: language
  101. A position as an accounting faculty member generally involves which of the following? (Select all that apply).
    • - research
    • - teaching
    • - consulting
  102. Which of the following differentiates between a bookkeeper and an accountant?
    Using accounting information as a member of upper management

    Interpreting information and making judgments
  103. Which of the following are characteristic of starting one's accounting career in public accounting? (Select all that apply).
    Preparation for future position in management

    Opportunity to see inside many different businesses

    Serves as a stepping stone for future accounting positions
  104. It is particularly important for marketing, management, and other business student to understand accounting principles related to
    revenue recognition.
Card Set
Williams: Financial and Managerial Accounting Chapter 1 SmartBook
Williams: Financial and Managerial Accounting Chapter 1 SmartBook