TEST BANK FOR FUNDAMENTAL ACCOUNTING PRINCIPLES 23RD EDITION BY WILD

TEST BANK FOR FUNDAMENTAL
ACCOUNTING PRINCIPLES 23RD EDITION
BY WILD

, Chapter 01 Accounting in Business

MULTIPLE CHOICE QUESTIONS

1) Accounting is an information and measurement system that identifies, records, and communicates
relevant, reliable, and comparable information about an organization's business activities.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Importance of Accounting
Learning Objective: 01-C1 Explain the purpose and importance of accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Industry; FN Decision Making


2) Recordkeeping, or bookkeeping, is the recording of transactions and events, either manually or
electronically. This is just one part of accounting.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Importance of Accounting
Learning Objective: 01-C1 Explain the purpose and importance of accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Industry; FN Decision Making


3) An accounting system captures relevant data about transactions and then classifies, records, and
reports data.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Importance of Accounting
Learning Objective: 01-C1 Explain the purpose and importance of accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Industry; FN Decision Making

,4) Financial accounting is the area of accounting aimed at serving external users by providing them
with general-purpose financial statements.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Industry; FN Decision Making


5) Internal operating activities include research and development, distribution, and human resources.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Industry; FN Decision Making


6) The primary objective of managerial accounting is to provide general purpose financial statements
to help external users analyze and interpret an organization's activities.
A) True
B) False
Answer: B
Explanation:
Diff: 1
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Industry; FN Decision Making

, 7) External auditors examine financial statements to verify that they are prepared according to
generally accepted accounting principles.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB: Communication
AICPA: BB Industry; FN Decision Making


8) External users include lenders, shareholders, customers, and regulators.
A) True
B) False
Answer: A
Explanation:
Diff: 2
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Understand
AACSB: Communication
AICPA: BB Industry; FN Decision Making


9) Regulators often have legal authority over certain activities of organizations.
A) True
B) False
Answer: A
Explanation:
Diff: 1
Topic: Users of Accounting Information
Learning Objective: 01-C2 Identify users and uses of, and opportunities in, accounting.
Bloom's: Remember
AACSB: Communication
AICPA: FN Decision Making; BB Legal