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Multiple Choice Quiz
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1
In which order does the accounting process continue in its cycle?
A)Accounting process→Accounting information→Decision makers→Economic Activities→
B)Accounting information→Accounting process→Decision makers→Economic Activities→
C)Accounting process→Accounting information→Economic Activities→Decision makers→
D)Economic Activities→Accounting process→Accounting information→Decision makers→
2
An accounting system is cost-effective when it:
A)produces useful information.
B)produces reports required by law.
C)uses computers to replace manual activities.
D)produces information that is more valuable than the cost of obtaining the information.
3
Which of the following affect a company's control environment?
A)Procedures for hiring and training of personnel
B)Management's assignment of authority and responsibility
C)Oversight by the board of directors
D)All of the above.
4
A criticism of the Sarbanes-Oxley Act (SOX) of 2002 is that it:
A)is specifically aimed at large utilities.
B)is specially aimed at the energy industry.
C)it is not cost effective.
D)it places no responsibility on top management.
5
Which of the following is not considered to be an external user?
A)Owner
B)Labor union
C)Board of directors
D)Trade associations
6
You made a $10,000 loan to your cousin's company. At the end of one year, the company returned to you $10,700. The $700 is called which of the following?
A)The return of investment
B)The return on investment
C)A 7.0% return on investment
D)Both (B) and (C)
7
International Financial Reporting Standards (IFRSs) are issued by which of the following?
A)Securities and Exchange Commission.
B)International Accounting Standards Board.
C)American Institute of Certified Public Accountants.
D)Public Company Accounting Oversight Board.
8
Which of the following is a professional accounting organization of certified public accountants that engages in a variety of professional activities, including establishing auditing standards, conducting research, and working closely with the FASB in establishing financial reporting standards?
A)Institute of Internal Auditors (IIA)
B)Institute of Management Accountants (IMA)
C)American Institute of Certified Public Accountants (AICPA)
D)Financial Accounting Standards Board (FASB)
9
For management accountants, communicating information fairly and objectively is included in the code of ethics requirement of
A)competence.
B)confidentiality.
C)integrity.
D)credibility.
10
When your authors use the expression "the watchdog of professional accounting," they are referring to which of the following?
A)Internal Revenue Service (IRS).
B)Securities Exchange Commission (SEC).
C)Financial Accounting Standards Board (FASB).
D)American Institute of Public Accountants (AICPA)







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