Accounting 9th Edition Horngren, Harrison, Oliver
(Test Bank All Chapters, 100% Original Verified A+ Grade)
Accounting, 9e (Horngren)
Chapter 1 Accounting and the Business Environment
Learning Objective 1-1
1) Accounting is the information system that measures business activity, processes the data into reports, and
communicates the results to decision makers.
Answer: TRUE
Diff: 1
LO: 1-1
EOC Ref: QC1-6
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Measurement, Reporting
2) Accounting is "the language of business."
Answer: TRUE
Diff: 1
LO: 1-1
EOC Ref: Accounting Vocabulary
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Reporting
3) A debt that a business owes to an outside party is called:
A) an asset.
B) a liability.
C) stockholders' equity.
D) revenue.
Answer: B
Diff: 1
LO: 1-1
EOC Ref: E1-14
AACSB: Analytic Skills
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
4) There are relatively few types of revenue. Which of the following in NOT a type of revenue?
A) Common Stock
B) Service
C) Interest
D) Sales
Answer: A
Diff: 1
LO: 1-1
EOC Ref: S1-1
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Measurement, Reporting
1
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
,5) A promise received from a business's customers to pay for goods and services that they received from the
business is called a(n):
A) account receivable.
B) account payable.
C) revenue.
D) expense.
Answer: A
Diff: 1
LO: 1-1
EOC Ref: Accounting Vocabulary
AACSB: Analytic Skills
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
6) 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.
C) Managerial accounting provides information for the public.
D) Managerial accounting provides information for taxing authorities.
Answer: A
Diff: 1
LO: 1-1
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Reporting
7) By definition, which of the following represents the owners of a corporation?
A) Customers
B) Creditors
C) Stockholders
D) Employees
Answer: C
Diff: 1
LO: 1-1
EOC Ref: QC1-2
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
8) Which of the following statements BEST defines financial statements?
A) Financial statements are the information systems that record and measure business transactions.
B) Financial statements are the verbal statements made to business news organizations by chief financial officers.
C) Financial statements are documents that report on a business in monetary terms, providing information to help
people make informed business decisions.
D) Financial statements are plans and forecasts for future time periods.
Answer: C
Diff: 2
LO: 1-1
EOC Ref: Accounting Vocabulary
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
2
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
,9) Items such as buildings and land are:
A) liabilities.
B) equity.
C) assets.
D) revenues.
Answer: C
Diff: 1
LO: 1-1
EOC Ref: Accounting Vocabulary
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
Learning Objective 1-2
1) Managerial accounting focuses on information for decision makers outside of the business, such as creditors and
taxing authorities.
Answer: FALSE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Decision Modeling
2) Business owners use accounting information to set goals, evaluate progress toward those goals, and take
corrective action when needed.
Answer: TRUE
Diff: 1
LO: 1-2
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Reporting
3) Outside investors would ordinarily use financial accounting information to decide whether or not to invest in a
business.
Answer: TRUE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Decision Modeling
4) An investor is someone who loans money to a business.
Answer: FALSE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
3
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
, 5) A creditor is a party that has an ownership interest in a business.
Answer: FALSE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
6) Different users of financial statements (investors, creditors, tax authorities, etc.) all focus on the same parts of the
financial statements for the information they need.
Answer: FALSE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Decision Modeling, Measurement
7) Many organizations have contributed to the establishment of 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
Diff: 1
LO: 1-2
EOC Ref: QC1-1
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Measurement, Reporting
8) 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
Diff: 1
LO: 1-2
EOC Ref: S1-3
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
4
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
(Test Bank All Chapters, 100% Original Verified A+ Grade)
Accounting, 9e (Horngren)
Chapter 1 Accounting and the Business Environment
Learning Objective 1-1
1) Accounting is the information system that measures business activity, processes the data into reports, and
communicates the results to decision makers.
Answer: TRUE
Diff: 1
LO: 1-1
EOC Ref: QC1-6
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Measurement, Reporting
2) Accounting is "the language of business."
Answer: TRUE
Diff: 1
LO: 1-1
EOC Ref: Accounting Vocabulary
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Reporting
3) A debt that a business owes to an outside party is called:
A) an asset.
B) a liability.
C) stockholders' equity.
D) revenue.
Answer: B
Diff: 1
LO: 1-1
EOC Ref: E1-14
AACSB: Analytic Skills
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
4) There are relatively few types of revenue. Which of the following in NOT a type of revenue?
A) Common Stock
B) Service
C) Interest
D) Sales
Answer: A
Diff: 1
LO: 1-1
EOC Ref: S1-1
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Measurement, Reporting
1
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
,5) A promise received from a business's customers to pay for goods and services that they received from the
business is called a(n):
A) account receivable.
B) account payable.
C) revenue.
D) expense.
Answer: A
Diff: 1
LO: 1-1
EOC Ref: Accounting Vocabulary
AACSB: Analytic Skills
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
6) 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.
C) Managerial accounting provides information for the public.
D) Managerial accounting provides information for taxing authorities.
Answer: A
Diff: 1
LO: 1-1
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Reporting
7) By definition, which of the following represents the owners of a corporation?
A) Customers
B) Creditors
C) Stockholders
D) Employees
Answer: C
Diff: 1
LO: 1-1
EOC Ref: QC1-2
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
8) Which of the following statements BEST defines financial statements?
A) Financial statements are the information systems that record and measure business transactions.
B) Financial statements are the verbal statements made to business news organizations by chief financial officers.
C) Financial statements are documents that report on a business in monetary terms, providing information to help
people make informed business decisions.
D) Financial statements are plans and forecasts for future time periods.
Answer: C
Diff: 2
LO: 1-1
EOC Ref: Accounting Vocabulary
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
2
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
,9) Items such as buildings and land are:
A) liabilities.
B) equity.
C) assets.
D) revenues.
Answer: C
Diff: 1
LO: 1-1
EOC Ref: Accounting Vocabulary
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
Learning Objective 1-2
1) Managerial accounting focuses on information for decision makers outside of the business, such as creditors and
taxing authorities.
Answer: FALSE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Decision Modeling
2) Business owners use accounting information to set goals, evaluate progress toward those goals, and take
corrective action when needed.
Answer: TRUE
Diff: 1
LO: 1-2
EOC Ref: E1-15
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Reporting
3) Outside investors would ordinarily use financial accounting information to decide whether or not to invest in a
business.
Answer: TRUE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Decision Modeling
4) An investor is someone who loans money to a business.
Answer: FALSE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
3
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
, 5) A creditor is a party that has an ownership interest in a business.
Answer: FALSE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
6) Different users of financial statements (investors, creditors, tax authorities, etc.) all focus on the same parts of the
financial statements for the information they need.
Answer: FALSE
Diff: 1
LO: 1-2
EOC Ref: S1-2
AACSB: Reflective Thinking
AICPA Business: Strategic/Critical Thinking
AICPA Functional: Decision Modeling, Measurement
7) Many organizations have contributed to the establishment of 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
Diff: 1
LO: 1-2
EOC Ref: QC1-1
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Measurement, Reporting
8) 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
Diff: 1
LO: 1-2
EOC Ref: S1-3
AACSB: Reflective Thinking
AICPA Business: Legal/Regulatory
AICPA Functional: Reporting
4
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
