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1 | |
Financial statements are prepared: |
| | A) | Only for publicly owned business organizations. |
| | B) | For corporations, but not for sole proprietorships or partnerships. |
| | C) | Primarily for the benefit of persons outside of the business organization. |
| | D) | In either monetary or nonmonetary terms, depending upon the need of the decision maker. |
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2 | |
The basic purpose of an accounting system is to: |
| | A) | Develop financial statements in conformity with generally accepted accounting principles. |
| | B) | Provide as much useful information to decision makers as possible, regardless of cost. |
| | C) | Record changes in the financial position of an organization by applying the concepts of double-entry accounting. |
| | D) | Meet an organization's need for accounting information as efficiently as possible. |
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3 | |
Information is cost effective when: |
| | A) | The information aids management in controlling costs. |
| | B) | The information is based upon historical costs, rather than upon estimated market values. |
| | C) | The value of the information exceeds the cost of producing it. |
| | D) | The information is generated by a computer-based accounting system. |
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4 | |
Although accounting information is used by a wide variety of external parties, financial reporting is primarily directed toward the information needs of: |
| | A) | Investors and creditors.. |
| | B) | Government agencies such as the Internal Revenue Service. |
| | C) | Customers. |
| | D) | Trade associations and labor unions. |
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5 | |
A complete set of financial statements for Hartman Company, at December 31, 1999, would include each of the following, except: |
| | A) | Balance sheet as of December 31, 1999. |
| | B) | Income statement for the year ended December 31, 1999. |
| | C) | Statement of projected cash flows for 2000. |
| | D) | Notes containing additional information that is useful in interpreting the financial statements. |
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6 | |
All of the following are characteristics of managerial accounting, except: |
| | A) | Reports are used primarily by insiders rather than by persons outside of the business entity. |
| | B) | Its purpose is to assist managers in planning and controlling business operations. |
| | C) | Information must be developed in conformity with generally accepted accounting principles or with income tax regulations. |
| | D) | Information may be tailored to assist in specific managerial decisions. |
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7 | |
In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial accounting report is more likely to: |
| | A) | Be used by decision makers outside of the business organization. |
| | B) | Focus upon the operation results of the most recently completed accounting period. |
| | C) | View the entire organization as the reporting entity. |
| | D) | Be tailored to the specific needs of an individual decision maker. |
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2002 McGraw-Hill Higher Education