TEST BANK FOR FINANCIAL AND MANAGERIAL ACCOUNTING, 15TH EDITION, CARL WARREN

TEST BANK FOR FINANCIAL AND
MANAGERIAL ACCOUNTING, 15TH
EDITION, CARL WARREN, JEFFERSON P.
JONES WILLIAM B. TAYLER

,Name: Class: Date:

Chapter 01 - Introduction to Accounting and Business

Table of Contents
1. Introduction to Accounting and Business.
2. Analyzing Transactions.
3. The Adjusting Process.
4. The Accounting Cycle.
5. Accounting for Retail Businesses.
6. Inventories.
7. Internal Control and Cash.
8. Receivables.
9. Long-Term Assets: Fixed and Intangible.
10. Liabilities: Current, Installment Notes, and Contingencies.
11. Liabilities: Bonds Payable.
12. Corporations: Organization, Stock Transactions, and Dividends.
13. Statement of Cash Flows.
14. Financial Statement Analysis.
15. Introduction to Managerial Accounting.
16. Job Order Costing.
17. Process Cost Systems.
18. Activity-Based Costing.
19. Support Department and Joint Cost Allocation.
20. Cost-Volume-Profit Analysis.
21. Variable Costing for Management Analysis.
22. Budgeting.
23. Evaluating Variances from Standard Costs.
24. Evaluating Decentralized Operations.
25. Differential Analysis and Product Pricing.
26. Capital Investment Analysis.
27. Lean Manufacturing and Activity Analysis.
28. The Balanced Scorecard and Corporate Social Responsibility.

,Name: Class: Date:

Chapter 01 - Introduction to Accounting and Business
1. A corporation is a business that is legally separate and distinct from its owners.
a. True
b. False
ANSWER: True

2. The role of accounting is to provide many different users with financial information to make economic decisions.
a. True
b. False
ANSWER: True

3. Accounting information users need reports about the economic activities and condition of businesses.
a. True
b. False
ANSWER: True

4. Managerial accounting information is used by external and internal users equally.
a. True
b. False
ANSWER: False

5. Senior executives cannot be criminally prosecuted for the wrong doings they commit on behalf of the companies where
they work.
a. True
b. False
ANSWER: False

6. Financial accounting provides information to all users, while the main focus for managerial accounting is to provide
information to the management.
a. True
b. False
ANSWER: True

7. Proper ethical conduct implies that you only consider what's in your best interest.
a. True
b. False
ANSWER: False

8. Some of the major fraudulent acts by senior executives started as what they considered to be small ethical lapses which
grew out of control.
a. True
b. False
ANSWER: True

9. A business is an organization in which basic resources or inputs, like materials and labor, are assembled and processed
to provide outputs in the form of goods or services to customers.
a. True
b. False

, Name: Class: Date:

Chapter 01 - Introduction to Accounting and Business

ANSWER: True

10. Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.
a. True
b. False
ANSWER: False

11. An example of a general-purpose financial statement would be a report about projected price increases related to
transportation costs.
a. True
b. False
ANSWER: False

12. The Sarbanes-Oxley Act established standards for corporate responsibility and disclosure.
a. True
b. False
ANSWER: True

13. The main objective for all businesses is to maximize unrealized profits.
a. True
b. False
ANSWER: False

14. The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing
entities.
a. True
b. False
ANSWER: False

15. The basic difference between manufacturing and retail companies is the completion level of the products they
purchase for resale to customers.
a. True
b. False
ANSWER: True

16. Proprietorships are owned by one owner and provide only services to their customers.
a. True
b. False
ANSWER: False

17. About 90% of the businesses in the United States are organized as corporations.
a. True
b. False
ANSWER: False

18. An example of an external user of accounting information is the federal government.
a. True