,TESTBANK FOR College Accounting, Chapters 1-15
24th Edition by James A. Heintz
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Name: Class: Date:
Chapter 01: Introduction to Accounting
True / False
1. The purpose of accounting is to provide financial information about the current operations and
financial conditions of a business to individuals and organizations.
a. True
b. False
ANSWER: True
2. Because financial information is communicated in accounting terms, accounting is said to be the
"language of business."
a. True
b. False
ANSWER: True
3. Interpreting refers to reviewing events that have taken place and determining how they affect a
business.
a. True
b. False
ANSWER: False
4. A partnership is owned by stockholders or shareholders and is managed by them.
a. True
b. False
ANSWER: False
5. A business that makes a product to sell is called a manufacturing business.
a. True
b. False
ANSWER: True
6. A public accountant can achieve professional recognition as a Certified Public Accountant by meeting
certain educational and experience requirements as determined by each state.
a. True
b. False
ANSWER: True
7. The six major steps of the accounting process are analyzing, recording, classifying, summarizing,
reporting, and interpreting.
a. True
b. False
ANSWER: True
8. Generally accepted accounting principles are procedures and guidelines to be followed in the
accounting/reporting process.
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,Name: Class: Date:
Chapter 01: Introduction to Accounting
a. True
b. False
ANSWER: True
9. Accountants design accounting information systems and analyze and interpret information.
a. True
b. False
ANSWER: True
10. Writing or using one of the latest technological advances to enter a transaction in the accounting
records is called summarizing.
a. True
b. False
ANSWER: False
11. The Financial Accounting Standards Board develops generally accepted accounting principles to
provide some assurance that companies are reporting business activities in a similar manner.
a. True
b. False
ANSWER: True
12. Stockholders may have very little influence on business decisions.
a. True
b. False
ANSWER: True
13. Cost accounting is used to develop a financial plan for a company.
a. True
b. False
ANSWER: False
14. The principal accounting officer of a company is called a public accountant.
a. True
b. False
ANSWER: False
15. A CMA is a Certified Marketing Auditor.
a. True
b. False
ANSWER: False
16. Creditors need detailed measures of business performance.
a. True
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,Name: Class: Date:
Chapter 01: Introduction to Accounting
b. False
ANSWER: False
17. Owners are most interested in a company's profitability and current financial performance.
a. True
b. False
ANSWER: True
Multiple Choice
18. Which of the following types of businesses is owned by stockholders?
a. Proprietorship
b. Corporation
c. Partnership with more than ten partners
d. Partnership with only two partners
ANSWER: b
19. A business that purchases a product from another business to sell to customers is called a
a. service business.
b. manufacturing business.
c. merchandising business.
d. nonprofit business.
ANSWER: c
20. A person who reviews the operating and accounting control procedures adopted by management to
make sure the controls are adequate and are being followed may be referred to as a(n)
a. bookkeeper.
b. accountant.
c. information processor.
d. internal auditor.
ANSWER: d
21. A person who records, sorts, and files accounting information in accounting records may be referred
to as a(n)
a. budgeter.
b. journalist.
c. accounting clerk.
d. scribe.
ANSWER: c
22. An internal auditor can achieve professional recognition in internal auditing by receiving which of the
following certificates?
a. GAAP
b. CIA
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,Name: Class: Date:
Chapter 01: Introduction to Accounting
c. CMA
d. CLU
ANSWER: b
23. The accounting function of classifying is
a. thinking about how events affect the business.
b. gathering similar events to provide information that is easy to understand.
c. sorting and grouping similar items together.
d. deciding the meaning and importance of the information in various reports.
ANSWER: c
24. Bringing together various items of information to determine or explain a result is
a. summarizing.
b. interpreting.
c. recording.
d. classifying.
ANSWER: a
25. Examining a transaction or event to determine its fundamental significance to the business so that the
relevant information may be properly processed is called
a. recording.
b. analyzing.
c. classifying.
d. interpreting.
ANSWER: b
26. Which of the following does NOT use nonprofit accounting guidelines and procedures?
a. Proprietorships
b. Hospitals
c. Educational institutions
d. Churches
ANSWER: a
27. Cost accountants provide a wide variety of services, including
a. designing and implementing accounting information systems.
b. auditing reviews.
c. performing general accounting services.
d. analyzing the cost effectiveness of products produced and services provided.
ANSWER: d
28. Public accountants do NOT offer which of the following services?
a. Auditing
b. Tax preparation
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,Name: Class: Date:
Chapter 01: Introduction to Accounting
c. Management consulting
d. Marketing analysis
ANSWER: d
29. Looking at events that have taken place and thinking about how they affect a business is called
a. analyzing.
b. skimming.
c. determining.
d. recalling.
ANSWER: a
30. One who assumes all risks for the business and whose personal assets can be taken to pay creditors is
called a
a. partnership.
b. sole proprietor.
c. corporation.
d. business owner.
ANSWER: b
31. Rules that US businesses must follow when preparing financial statements are called
a. IFRS.
b. Accounting Laws.
c. GAAP.
d. IRS.
ANSWER: c
32. The accountant who oversees the entire accounting process and is the principal accounting officer of
the company is called the
a. CEO.
b. Chief Counsel.
c. CIO.
d. Controller.
ANSWER: d
33. A business that buys a product from another business to sell to customers is called what type of
business?
a. Merchandising
b. Wholesaler
c. Broker dealer
d. Manufacturer
ANSWER: a
34. Entering financial information about events affecting the company into the accounting system is
called
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,Name: Class: Date:
Chapter 01: Introduction to Accounting
a. analyzing.
b. posting.
c. auditing.
d. recording.
ANSWER: d
35. Who designs the accounting information system and focuses on analyzing and interpreting
information by studying the impact of alternative decisions?
a. Accountants
b. Bookkeepers
c. Controllers
d. Stockholders
ANSWER: a
36. The owners of a corporation are called
a. corporate custodians.
b. partners.
c. stockholders.
d. politicians.
ANSWER: c
37. What word describes the aggregation of many similar events to provide information that is easy to
understand?
a. Analyzing
b. Summarizing
c. Reporting
d. Interpreting
ANSWER: b
38. Which activity is defined as the process by which accountants help managers develop a financial
plan?
a. Budgeting
b. Auditing
c. Summarizing
d. Classifying
ANSWER: a
39. A business that makes a product to sell is called what type of business?
a. Retail
b. Broker
c. Manufacturing
d. Merchandise
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter 01: Introduction to Accounting
40. Which area of accounting has responsibilities that include preparing various reports and financial
statements and analyzing operating, investing, and financing decisions?
a. Managerial accounting
b. Cost accounting
c. Tax accounting
d. Financial accounting
ANSWER: d
41. Which area of accounting involves the application of standard review and testing procedures to be
certain that proper accounting policies and practices have been followed?
a. Auditing
b. Bookkeeping
c. Financial accounting
d. Controlling
ANSWER: a
42. Which business form is owned by two or more people who assume the risks for the business and
whose assets may be taken to pay creditors?
a. Partnership
b. Corporation
c. Sole proprietor
d. LLC
ANSWER: a
43. The process of assessing the importance of a number such as the numbers calculated in a ratio
analysis is called
a. consolidating.
b. interpreting.
c. reviewing.
d. ranking.
ANSWER: b
44. The process in which accountants help managers develop a financial plan is known as
a. budgeting.
b. testing.
c. calculating.
d. auditing.
ANSWER: a
45. What is a sole proprietorship?
a. A business structure where multiple individuals share ownership and decision-making
b. A business structure where a single individual owns and operates the business
c. A business structure specifically designed for non-profit organizations
d. A business structure that is publicly traded on the stock market
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, Name: Class: Date:
Chapter 01: Introduction to Accounting
ANSWER: b
46. What type of business structure is characterized by limited liability for its owners and the ability to
raise capital through the sale of stock?
a. Sole proprietorship
b. Partnership
c. Corporation
d. Cooperative
ANSWER: c
47. Which of the following business structures provides limited liability to its owners?
a. Sole proprietorship
b. Partnership
c. Corporation
d. None of these choices has limited liability to the owners.
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 8
24th Edition by James A. Heintz
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel sheet
if it exists.
4- We have all what you need, we make update
at every time. There are many new editions
waiting you.
5- If you think you purchased the wrong file You
can contact us at every time, we can replace it
with true one.
Our email:
,Name: Class: Date:
Chapter 01: Introduction to Accounting
True / False
1. The purpose of accounting is to provide financial information about the current operations and
financial conditions of a business to individuals and organizations.
a. True
b. False
ANSWER: True
2. Because financial information is communicated in accounting terms, accounting is said to be the
"language of business."
a. True
b. False
ANSWER: True
3. Interpreting refers to reviewing events that have taken place and determining how they affect a
business.
a. True
b. False
ANSWER: False
4. A partnership is owned by stockholders or shareholders and is managed by them.
a. True
b. False
ANSWER: False
5. A business that makes a product to sell is called a manufacturing business.
a. True
b. False
ANSWER: True
6. A public accountant can achieve professional recognition as a Certified Public Accountant by meeting
certain educational and experience requirements as determined by each state.
a. True
b. False
ANSWER: True
7. The six major steps of the accounting process are analyzing, recording, classifying, summarizing,
reporting, and interpreting.
a. True
b. False
ANSWER: True
8. Generally accepted accounting principles are procedures and guidelines to be followed in the
accounting/reporting process.
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 01: Introduction to Accounting
a. True
b. False
ANSWER: True
9. Accountants design accounting information systems and analyze and interpret information.
a. True
b. False
ANSWER: True
10. Writing or using one of the latest technological advances to enter a transaction in the accounting
records is called summarizing.
a. True
b. False
ANSWER: False
11. The Financial Accounting Standards Board develops generally accepted accounting principles to
provide some assurance that companies are reporting business activities in a similar manner.
a. True
b. False
ANSWER: True
12. Stockholders may have very little influence on business decisions.
a. True
b. False
ANSWER: True
13. Cost accounting is used to develop a financial plan for a company.
a. True
b. False
ANSWER: False
14. The principal accounting officer of a company is called a public accountant.
a. True
b. False
ANSWER: False
15. A CMA is a Certified Marketing Auditor.
a. True
b. False
ANSWER: False
16. Creditors need detailed measures of business performance.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 01: Introduction to Accounting
b. False
ANSWER: False
17. Owners are most interested in a company's profitability and current financial performance.
a. True
b. False
ANSWER: True
Multiple Choice
18. Which of the following types of businesses is owned by stockholders?
a. Proprietorship
b. Corporation
c. Partnership with more than ten partners
d. Partnership with only two partners
ANSWER: b
19. A business that purchases a product from another business to sell to customers is called a
a. service business.
b. manufacturing business.
c. merchandising business.
d. nonprofit business.
ANSWER: c
20. A person who reviews the operating and accounting control procedures adopted by management to
make sure the controls are adequate and are being followed may be referred to as a(n)
a. bookkeeper.
b. accountant.
c. information processor.
d. internal auditor.
ANSWER: d
21. A person who records, sorts, and files accounting information in accounting records may be referred
to as a(n)
a. budgeter.
b. journalist.
c. accounting clerk.
d. scribe.
ANSWER: c
22. An internal auditor can achieve professional recognition in internal auditing by receiving which of the
following certificates?
a. GAAP
b. CIA
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
Chapter 01: Introduction to Accounting
c. CMA
d. CLU
ANSWER: b
23. The accounting function of classifying is
a. thinking about how events affect the business.
b. gathering similar events to provide information that is easy to understand.
c. sorting and grouping similar items together.
d. deciding the meaning and importance of the information in various reports.
ANSWER: c
24. Bringing together various items of information to determine or explain a result is
a. summarizing.
b. interpreting.
c. recording.
d. classifying.
ANSWER: a
25. Examining a transaction or event to determine its fundamental significance to the business so that the
relevant information may be properly processed is called
a. recording.
b. analyzing.
c. classifying.
d. interpreting.
ANSWER: b
26. Which of the following does NOT use nonprofit accounting guidelines and procedures?
a. Proprietorships
b. Hospitals
c. Educational institutions
d. Churches
ANSWER: a
27. Cost accountants provide a wide variety of services, including
a. designing and implementing accounting information systems.
b. auditing reviews.
c. performing general accounting services.
d. analyzing the cost effectiveness of products produced and services provided.
ANSWER: d
28. Public accountants do NOT offer which of the following services?
a. Auditing
b. Tax preparation
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter 01: Introduction to Accounting
c. Management consulting
d. Marketing analysis
ANSWER: d
29. Looking at events that have taken place and thinking about how they affect a business is called
a. analyzing.
b. skimming.
c. determining.
d. recalling.
ANSWER: a
30. One who assumes all risks for the business and whose personal assets can be taken to pay creditors is
called a
a. partnership.
b. sole proprietor.
c. corporation.
d. business owner.
ANSWER: b
31. Rules that US businesses must follow when preparing financial statements are called
a. IFRS.
b. Accounting Laws.
c. GAAP.
d. IRS.
ANSWER: c
32. The accountant who oversees the entire accounting process and is the principal accounting officer of
the company is called the
a. CEO.
b. Chief Counsel.
c. CIO.
d. Controller.
ANSWER: d
33. A business that buys a product from another business to sell to customers is called what type of
business?
a. Merchandising
b. Wholesaler
c. Broker dealer
d. Manufacturer
ANSWER: a
34. Entering financial information about events affecting the company into the accounting system is
called
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter 01: Introduction to Accounting
a. analyzing.
b. posting.
c. auditing.
d. recording.
ANSWER: d
35. Who designs the accounting information system and focuses on analyzing and interpreting
information by studying the impact of alternative decisions?
a. Accountants
b. Bookkeepers
c. Controllers
d. Stockholders
ANSWER: a
36. The owners of a corporation are called
a. corporate custodians.
b. partners.
c. stockholders.
d. politicians.
ANSWER: c
37. What word describes the aggregation of many similar events to provide information that is easy to
understand?
a. Analyzing
b. Summarizing
c. Reporting
d. Interpreting
ANSWER: b
38. Which activity is defined as the process by which accountants help managers develop a financial
plan?
a. Budgeting
b. Auditing
c. Summarizing
d. Classifying
ANSWER: a
39. A business that makes a product to sell is called what type of business?
a. Retail
b. Broker
c. Manufacturing
d. Merchandise
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter 01: Introduction to Accounting
40. Which area of accounting has responsibilities that include preparing various reports and financial
statements and analyzing operating, investing, and financing decisions?
a. Managerial accounting
b. Cost accounting
c. Tax accounting
d. Financial accounting
ANSWER: d
41. Which area of accounting involves the application of standard review and testing procedures to be
certain that proper accounting policies and practices have been followed?
a. Auditing
b. Bookkeeping
c. Financial accounting
d. Controlling
ANSWER: a
42. Which business form is owned by two or more people who assume the risks for the business and
whose assets may be taken to pay creditors?
a. Partnership
b. Corporation
c. Sole proprietor
d. LLC
ANSWER: a
43. The process of assessing the importance of a number such as the numbers calculated in a ratio
analysis is called
a. consolidating.
b. interpreting.
c. reviewing.
d. ranking.
ANSWER: b
44. The process in which accountants help managers develop a financial plan is known as
a. budgeting.
b. testing.
c. calculating.
d. auditing.
ANSWER: a
45. What is a sole proprietorship?
a. A business structure where multiple individuals share ownership and decision-making
b. A business structure where a single individual owns and operates the business
c. A business structure specifically designed for non-profit organizations
d. A business structure that is publicly traded on the stock market
Copyright Cengage Learning. Powered by Cognero. Page 7
, Name: Class: Date:
Chapter 01: Introduction to Accounting
ANSWER: b
46. What type of business structure is characterized by limited liability for its owners and the ability to
raise capital through the sale of stock?
a. Sole proprietorship
b. Partnership
c. Corporation
d. Cooperative
ANSWER: c
47. Which of the following business structures provides limited liability to its owners?
a. Sole proprietorship
b. Partnership
c. Corporation
d. None of these choices has limited liability to the owners.
ANSWER: c
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