Type:
Test Bank
Resource:
Financial Accounting
Edition:
7th Edition
Author(s):
Walter T. Harrison Wendy Tietz C. Thomas Greg Berberich Catherine Seguin
Test Item File Kathy Falk University of Toronto
Financial Accounting Seventh Canadian Edition C. William (Bill) Thomas Baylor University
Wendy M. Tietz Kent State University
Walter T. Harrison, Jr. Baylor University
Greg Berberich University of Waterloo
Catherine Seguin University of Toronto
Financial Accounting, Cdn. Ed., 7CE (Harrison/Horngren) Chapter 1 The Financial Statements 1.1
Explain why accounting is the language of business
1) Which of the following persons or groups have the ultimate control of a corporation? A) the chief executive officer B) the board of directors C) the audit committee D) the shareholders Answer: D Diff: 2 Type: MC L.O.: 1-1 CPA COMPETENCIES: Chapter 1 1.1.1 Evaluates financial reporting needs 1.1.2 Evaluates the appropriateness of the basis of financial reporting 1.1.3 Evaluates reporting processes to support reliable financial reporting 2) Financial statements are: A) reports issued by outside consultants who are hired to analyze key operations of the business B) reports created by management that states it is responsible for the acts of the corporation C) standard documents that tell us how well a business is performing and where it stands in financial terms D) standard documents issued by outside consultants who are hired to analyze key operations of the business in financial terms Answer: C Diff: 1 Type: MC L.O.: 1-1 CPA COMPETENCIES: Chapter 1 1.1.1 Evaluates financial reporting needs 1.1.2 Evaluates the appropriateness of the basis of financial reporting 1.1.3 Evaluates reporting processes to support reliable financial reporting 3) Since they are both the same activities, the terms "accounting" and "bookkeeping" are synonymous and can be used interchangeably. Answer: FALSE Explanation: Bookkeeping is a mechanical part of accounting. Accounting requires an understanding of the principles used. Diff: 2 Type: TF L.O.: 1-1 CPA COMPETENCIES: Chapter 1 1.1.1 Evaluates financial reporting needs 1.1.2 Evaluates the appropriateness of the basis of financial reporting 1.1.3 Evaluates reporting processes to support reliable financial reporting
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