Accounting 8th Edition (International Version) Horngren, Harrison, Bamber
(Solutions Manual All Chapters, 100% Original Verified A+ Grade)
Chapter 1: Accounting and the Business Environment
1.1-1 Accounting is the information system that measures business activity, processes the data into reports, and
communicates the results to decisions makers.
Answer: True
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-2 Accounting is "the language of business."
Answer: True
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-3 Which financial statement is defined as reporting the inflows and outflows of cash in a proprietorship?
A) Income statement
B) Statement of owner’s equity
C) Balance sheet
D) Statement of cash flows
Answer: D
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-4 An obligation that a proprietorship owes to an outside person or agency is called a(n):
A) asset.
B) liability.
C) owner’s equity.
D) revenue.
Answer: B
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1
,1.1-5 There are relatively few types of revenue. Which of the following in NOT a type of revenue?
A) Withdrawals paid to proprietors
B) Service
C) Interest
D) Sales
Answer: A
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-6 A promise to pay from customers for goods and services that they received from a company represent:
A) accounts receivable.
B) accounts payable.
C) revenues.
D) expenses.
Answer: A
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-7 Accounting information may be generated for a variety of purposes. The key products of accounting are:
A) financial statements.
B) remittance advices.
C) spreadsheets.
D) work sheets.
Answer: A
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-8 Accounting is the information system that provides information to various users. This process includes:
A) compiling the data into reports.
B) measuring business activity.
C) communicating the results to decisions makers.
D) all of the above.
Answer: D
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
2
,1.1-9 Which of the following statements best describes managerial accounting?
A) Managerial accounting focuses on information for internal decision making.
B) Managerial accounting focuses on outside investors and lenders that are not part of day-to-day
management.
C) Managerial accounting provides information for the public.
D) None of these statements is true.
Answer: A
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-10 By definition, which of the following represent the owners of a proprietorship?
A) Customers
B) Creditors
C) Proprietor
D) None of the above
Answer: C
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.2-1 Managerial accounting focuses on information for decision makers outside the company.
Answer: False
LO: 1-2
Diff: 1
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.2-2 Business owners use accounting information to set goals, evaluate progress toward those goals, and take
corrective action when needed.
Answer: True
LO: 1-2
Diff: 1
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
3
, 1.2-3 Outside investors often use accounting information to decide whether or not to invest in a business.
Answer: True
LO: 1-2
Diff: 1
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Decision Modeling
1.2-4 Many organizations have contributed to the process of creating and/or using generally accepted
accounting principles. Which of the following organizations has the primary responsibility for
formulating accounting standards?
A) FASB
B) CMA
C) AICPA
D) SEC
Answer: A
LO: 1-2
Diff: 2
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Legal/Regulatory
AICPA Functional Competencies: Measurement, Reporting
1.2-5 Which of the following is a licensed accountant who serves the general public rather than an accountant
who serves one particular company?
A) CPA
B) CMA
C) SEC
D) FASB
Answer: A
LO: 1-2
Diff: 2
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Legal/Regulatory
AICPA Functional Competencies: Measurement, Reporting
1.2-6 The primary objective of financial reporting is to provide information useful for making investment and
lending decisions. To be useful, information must possess certain characteristics. Which of the following
is NOT one of the basic characteristics that financial statements must possess to be useful?
A) Reliability
B) An owner’s equity section
C) Relevance
D) Comparability
Answer: B
LO: 1-2
Diff: 2
EOC Ref: E1-15 AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Decision Modeling
4
(Solutions Manual All Chapters, 100% Original Verified A+ Grade)
Chapter 1: Accounting and the Business Environment
1.1-1 Accounting is the information system that measures business activity, processes the data into reports, and
communicates the results to decisions makers.
Answer: True
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-2 Accounting is "the language of business."
Answer: True
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-3 Which financial statement is defined as reporting the inflows and outflows of cash in a proprietorship?
A) Income statement
B) Statement of owner’s equity
C) Balance sheet
D) Statement of cash flows
Answer: D
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-4 An obligation that a proprietorship owes to an outside person or agency is called a(n):
A) asset.
B) liability.
C) owner’s equity.
D) revenue.
Answer: B
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1
,1.1-5 There are relatively few types of revenue. Which of the following in NOT a type of revenue?
A) Withdrawals paid to proprietors
B) Service
C) Interest
D) Sales
Answer: A
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-6 A promise to pay from customers for goods and services that they received from a company represent:
A) accounts receivable.
B) accounts payable.
C) revenues.
D) expenses.
Answer: A
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-7 Accounting information may be generated for a variety of purposes. The key products of accounting are:
A) financial statements.
B) remittance advices.
C) spreadsheets.
D) work sheets.
Answer: A
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-8 Accounting is the information system that provides information to various users. This process includes:
A) compiling the data into reports.
B) measuring business activity.
C) communicating the results to decisions makers.
D) all of the above.
Answer: D
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
2
,1.1-9 Which of the following statements best describes managerial accounting?
A) Managerial accounting focuses on information for internal decision making.
B) Managerial accounting focuses on outside investors and lenders that are not part of day-to-day
management.
C) Managerial accounting provides information for the public.
D) None of these statements is true.
Answer: A
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.1-10 By definition, which of the following represent the owners of a proprietorship?
A) Customers
B) Creditors
C) Proprietor
D) None of the above
Answer: C
LO: 1-1
Diff: 1
EOC Ref: E1-14
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic, Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.2-1 Managerial accounting focuses on information for decision makers outside the company.
Answer: False
LO: 1-2
Diff: 1
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
1.2-2 Business owners use accounting information to set goals, evaluate progress toward those goals, and take
corrective action when needed.
Answer: True
LO: 1-2
Diff: 1
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Measurement, Reporting
3
, 1.2-3 Outside investors often use accounting information to decide whether or not to invest in a business.
Answer: True
LO: 1-2
Diff: 1
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Decision Modeling
1.2-4 Many organizations have contributed to the process of creating and/or using generally accepted
accounting principles. Which of the following organizations has the primary responsibility for
formulating accounting standards?
A) FASB
B) CMA
C) AICPA
D) SEC
Answer: A
LO: 1-2
Diff: 2
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Legal/Regulatory
AICPA Functional Competencies: Measurement, Reporting
1.2-5 Which of the following is a licensed accountant who serves the general public rather than an accountant
who serves one particular company?
A) CPA
B) CMA
C) SEC
D) FASB
Answer: A
LO: 1-2
Diff: 2
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Legal/Regulatory
AICPA Functional Competencies: Measurement, Reporting
1.2-6 The primary objective of financial reporting is to provide information useful for making investment and
lending decisions. To be useful, information must possess certain characteristics. Which of the following
is NOT one of the basic characteristics that financial statements must possess to be useful?
A) Reliability
B) An owner’s equity section
C) Relevance
D) Comparability
Answer: B
LO: 1-2
Diff: 2
EOC Ref: E1-15 AACSB: Reflective Thinking
AICPA Business Perspective Competencies: Strategic/Critical Thinking
AICPA Functional Competencies: Decision Modeling
4
