Question 1

Writing or using one of the latest technological advances to enter a transaction in the accounting records is called summarizing.

Accepted Answer

Summarizing refers to the process of condensing and combining information from multiple transactions into a single entry in the accounting records. Using the latest technological advances to enter a transaction would fall under the category of recording, not summarizing.

Question 2

Cost accounting is used to develop a financial plan for a company.

Accepted Answer

Cost accounting is used to measure, analyze, and report financial and nonfinancial information related to the costs of acquiring or using resources in an organization. It is primarily used for internal management rather than developing a financial plan.

Question 3

A corporation is usually managed by
A) stockholders.
B) a professional manager.
C) a proprietor.
D) two or more partners.

Accepted Answer

A corporation is typically managed by a professional manager who is appointed by the board of directors to oversee the day-to-day operations of the company. While stockholders have a say in the management of the corporation through their ability to elect the board of directors, they do not usually have direct involvement in day-to-day management decisions. Proprietors and partnerships are typically not associated with corporations, as they are separate legal entities.

Question 4

The principal accounting officer of a company is called a public accountant.

Accepted Answer

The principal accounting officer of a company is called a Chief Financial Officer (CFO) or Controller. A public accountant, on the other hand, is someone who provides accounting services to the public, such as auditing or tax preparation.

Question 5

​Interpreting refers to reviewing events that have taken place and determining how they affect a business.
​

Accepted Answer

Interpreting refers to the process of translating spoken or sign language communication from one language to another in real-time, not reviewing past events to determine their impact on a business.

Question 6

A partnership is owned by stockholders or shareholders and is managed by them.

Accepted Answer

A partnership is owned and managed by the partners, not by stockholders or shareholders.

Question 7

A business that makes a product to sell is called a manufacturing business.

Accepted Answer

A business that produces goods to sell is called a manufacturing business.

Question 8

The Financial Accounting Standards Board develops generally accepted accounting principles to provide some assurance that companies are reporting business activities in a similar manner.

Accepted Answer

The Financial Accounting Standards Board (FASB) is responsible for developing and setting Generally Accepted Accounting Principles (GAAP) in the United States. The goal of GAAP is to provide a standard framework for financial reporting that allows investors and stakeholders to easily compare financial statements across companies.

Question 9

The six major steps of the accounting process are analyzing, recording, classifying, summarizing, reporting, and interpreting.

Accepted Answer

The six major steps of the accounting process are indeed analyzing, recording, classifying, summarizing, reporting, and interpreting.

Question 10

Since financial information is communicated in accounting terms, accounting is said to be the "language of business."

Accepted Answer

Accounting provides a common language for businesses to communicate their financial information to stakeholders, such as investors, creditors, and managers. Therefore, accounting is often referred to as the "language of business."

Question 11

A person who reviews the operating and accounting control procedures adopted by management to make sure the controls are adequate and are being followed may be referred to as a(n)
A) bookkeeper.
B) accountant.
C) information processor.
D) internal auditor.

Accepted Answer

The role described best matches that of an internal auditor, who is responsible for reviewing and evaluating internal controls within an organization to ensure they are effective and being followed. Bookkeepers primarily handle the recording and processing of financial transactions, while accountants may be involved in a range of activities including financial reporting, tax preparation, and analysis. Information processors do not typically have a specific focus on internal controls or accounting procedures.

Question 12

Accountants design accounting information systems and analyze and interpret information.

Accepted Answer

Accountants are responsible for designing accounting information systems to ensure accurate and efficient financial reporting. They also analyze and interpret financial information to provide insights and recommendations for decision making.

Question 13

A public accountant can achieve professional recognition as a Certified Public Accountant by meeting certain educational and experience requirements as determined by each state.

Accepted Answer

This statement is true. Each state has its own specific requirements for becoming a Certified Public Accountant, which typically include a minimum amount of education and experience.

Question 14

Stockholders may have very little influence on business decisions.

Accepted Answer

While stockholders technically own a portion of the company, their power to influence business decisions is often limited to voting on board members, approving major changes such as mergers or acquisitions, or voicing their opinions at shareholder meetings. The day-to-day operations and management of the company are typically left to the executives and senior management team.

Question 15

Which of the following types of businesses is owned by stockholders?
A) proprietorship
B) corporation
C) partnership with more than ten partners
D) partnership with only two partners

Accepted Answer

Corporations are owned by stockholders who hold shares in the company. Proprietorships are owned by a single individual, while partnerships can be owned by two or more individuals, but they are not owned by stockholders. The number of partners does not determine whether a business is owned by stockholders.

Question 16

A business that purchases a product from another business to sell to customers is called a
A) service business.
B) manufacturing business.
C) merchandising business.
D) nonprofit business.

Accepted Answer

A merchandising business is a business that purchases finished goods from manufacturers or wholesalers and sells them to customers. This type of business generates revenue by marking up the cost of the products they sell.

Question 17

Generally accepted accounting principles are procedures and guidelines to be followed in the accounting/reporting process.

Accepted Answer

Generally accepted accounting principles (GAAP) are a set of standard procedures and guidelines that must be followed in the reporting and preparation of financial statements to ensure consistency and accuracy. These principles are widely recognized and accepted in the accounting profession as essential for maintaining the integrity of financial reporting.

Question 18

A CMA is a Certified Marketing Auditor.

Accepted Answer

A CMA stands for Certified Management Accountant, not Certified Marketing Auditor.

Question 19

Since financial information is communicated in accounting terms and is the eyes and ears of management, accounting is said to be
A) the language of business.
B) public.
C) private.
D) nonprofit.

Accepted Answer

Accounting is often called the "language of business" because it communicates a company's financial information in a standardized way that can be understood by stakeholders, including management, investors, creditors, regulators, and others. This language includes terms like debits, credits, assets, liabilities, revenues, and expenses, which are used to record and track financial transactions and events.

Question 20

The purpose of accounting is to provide financial information about the current operations and financial conditions of a business to individuals and organizations.

Accepted Answer

The purpose of accounting is to provide financial information about the current operations and financial conditions of a business to individuals and organizations, including investors, creditors, managers, and government agencies. This information is important for decision-making, planning, and controlling the business activities.

Quiz 1: Introduction to Accounting

Writing or using one of the latest technological advances to enter a transaction in the accounting records is called summarizing.

Cost accounting is used to develop a financial plan for a company.

A corporation is usually managed by

The principal accounting officer of a company is called a public accountant.

​Interpreting refers to reviewing events that have taken place and determining how they affect a business. ​

A partnership is owned by stockholders or shareholders and is managed by them.

A business that makes a product to sell is called a manufacturing business.

The Financial Accounting Standards Board develops generally accepted accounting principles to provide some assurance that companies are reporting business activities in a similar manner.

The six major steps of the accounting process are analyzing, recording, classifying, summarizing, reporting, and interpreting.

Since financial information is communicated in accounting terms, accounting is said to be the "language of business."

A person who reviews the operating and accounting control procedures adopted by management to make sure the controls are adequate and are being followed may be referred to as a(n)

Accountants design accounting information systems and analyze and interpret information.

A public accountant can achieve professional recognition as a Certified Public Accountant by meeting certain educational and experience requirements as determined by each state.

Stockholders may have very little influence on business decisions.

Which of the following types of businesses is owned by stockholders?

A business that purchases a product from another business to sell to customers is called a

Generally accepted accounting principles are procedures and guidelines to be followed in the accounting/reporting process.

A CMA is a Certified Marketing Auditor.

Since financial information is communicated in accounting terms and is the eyes and ears of management, accounting is said to be

The purpose of accounting is to provide financial information about the current operations and financial conditions of a business to individuals and organizations.

Interpreting refers to reviewing events that have taken place and determining how they affect a business.