TEST BANK
HORNGREN'S ACCOUNTING: THE FINANCIAL CHAPTERS
, TABLE OF CONTENTS
1. Accounting and the Business Environment
2. Recording Business Transactions
3. The Adjusting Process
4. Completing the Accounting Cycle
5. Merchandising Operations
6. Merchandise Inventory
7. Accounting Information Systems
8. Internal Control and Cash
9. Receivables
10. Plant Assets, Natural Resources, and Intangibles
11. Current Liabilities and Payroll
12. Partnerships
13. Corporations
14. Long-Term Liabilities
15. Investments
16. The Statement of Cash Flows
17. Financial Statement Analysis
,Horngren's Accounting: The Financial Chapters, 14e (Miller-Nobles)
Chapter F:1 Accounting And The Business Environment
Learning Objective F:1-1
Accounting Is The Information System That Measures Business Activities, Processes The Information
Into Reports, And Communicates The Results To Decision Makers.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
The Knowledge Of Accounting Is Rarely Used To Help Make Business And Personal Financial
Decisions. Answer: FALSE
Explanation: The Knowledge Of Accounting Is Used Daily To Assist In Making Decisions For
Both Businesses And Personal Items.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
Accounting Starts With Economic Activities That Accountants Review And Evaluate Using Critical
Thinking And Judgment To Create Useful Information That Helps Individuals Make Good Decisions.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
Accounting Is Referred To As The Language Of Business Because It Is The Method Of
Communicating Business Information To Decision Makers.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
1
, A Model Called The ________ Was Created To Help Students And The Public Understand What
Accounting
Is.
A) Decision Making Model
B) Business Model
C) Pathways Vision Model
D) Cost Model
Answer: C
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
The Pathways Vision Model Emphasizes That Good Decisions Have An Impact On ________.
Accounting Judgments And Economic Activity
Accounting Judgments Only
Economic Activity Only
Neither Accounting Judgments Nor Economic
Activity Answer: A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
Managerial Accounting Focuses On Providing Information For External Decision
Makers. Answer: FALSE
Explanation: Managerial Accounting Focuses On Providing Information For Internal Decision Makers.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Investors Primarily Use Managerial Accounting Information For Decision-Making
Purposes. Answer: FALSE
Explanation: External Users (Investors) Use Financial Accounting Information.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
2
, A Creditor Is A Person Who Owes Money To The
Business. Answer: FALSE
Explanation: A Creditor Is A Person To Whom A Business Owes Money.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Income Tax Is Calculated Using Accounting Information.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Financial Accounting Focuses On Information For Decision Makers Outside Of The Business,
Such As Creditors And Taxing Authorities.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Business Owners Use Accounting Information To Set Goals, Evaluate Progress Toward Those
Goals, And Make Adjustments When Needed.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Outside Investors Ordinarily Use Financial Accounting Information To Decide Whether Or Not To
Invest In A Business.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
3
, A Creditor Is Any Person Who Has An Ownership Interest In A
Business. Answer: FALSE
Explanation: A Creditor Is Any Person To Whom Money Is Owed.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Managerial Accounting Focuses On Information Needed By Lenders, Customers, And The
Federal Government.
Answer: FALSE
Explanation: Financial Accounting Focuses On Providing Information For External Decision Makers,
Such As Lenders, Customers, And The Federal Government.
Diff: 1
LO: F:1-1
AACSB: Interpersonal Relations And Teamwork
AICPA Functional: Reporting
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Any Person Or Business To Whom A Business Owes Money Is Called The Business's Creditor.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Decision Makers Are Looking For An International Accounting Language Because The Most
Significant Change In The Business World In The Last Decade Has Been The Huge Increase In
International Commerce. Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Reporting
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
4
, Managerial Accounting Provides Information To
________. A) Internal Decision Makers
B) Outside Investors And
Lenders C) Creditors
D) Taxing
Authorities Answer:
A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
The Field Of Accounting That Focuses On Providing Information For External Decision Makers Is
________.
A) Managerial
Accounting B) Financial
Accounting C) Cost
Accounting
D) Nonmonetary
Accounting Answer: B
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
The Field Of Accounting That Focuses On Providing Information For Internal Decision Makers Is
________.
A) Managerial
Accounting B) Financial
Accounting
C) Nonmonetary
Accounting D)
Governmental Accounting
Answer: A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2 : Decision Makers: The Users Of Accounting Information
,5
, Which Of The Following Users Would Rely On Managerial Accounting Information For Decision-
Making Purposes?
A) Potential
Investors B)
Creditors
C) Customers
D) Company
Managers Answer: D
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2 : Decision Makers: The Users Of Accounting Information
Which Of The Following Is A Decision Made By An Internal User?
Should We Lend Money To The Business?
How Much Money Should The Business Budget For Production?
Should I Invest In The Business?
All Of The Above Are Correct.
Answer: B
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Financial Analysts Perform Reviews Of Companies To Ensure Compliance To Rules And
Regulations. Answer: FALSE
Explanation: Auditors Perform Reviews Of Companies To Ensure Compliance To Rules And
Regulations.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
Certified Management Accountants (Cmas) Specialize Only In Financial Management Knowledge
And Work For A Single Company.
Answer: FALSE
Explanation: Certified Management Accountants (Cmas) Specialize In Accounting And Financial
Management Knowledge And Typically Work For A Single Company.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
6
, Certified Public Accountants (Cpas) Are Licensed Professional Accountants Who Serve The
General Public.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
________ Are Professional Accountants Who Serve The General Public, Not One Particular
Company. A) Certified Public Accountants
B) Financial Managers
C) Internal Auditors
D) Controllers
Answer: A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
Accountants Generally Work Either In Public, Private Or ________ Accounting.
Governmental
Personal
Managerial
State
Answer: A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
________ Typically Work In A Manufacturing Business And Help Analyze Accounting
Data. A) Financial Analysts
B) Cost
Accountants C)
Internal Auditors
D) Controllers
Answer: B
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
7
HORNGREN'S ACCOUNTING: THE FINANCIAL CHAPTERS
, TABLE OF CONTENTS
1. Accounting and the Business Environment
2. Recording Business Transactions
3. The Adjusting Process
4. Completing the Accounting Cycle
5. Merchandising Operations
6. Merchandise Inventory
7. Accounting Information Systems
8. Internal Control and Cash
9. Receivables
10. Plant Assets, Natural Resources, and Intangibles
11. Current Liabilities and Payroll
12. Partnerships
13. Corporations
14. Long-Term Liabilities
15. Investments
16. The Statement of Cash Flows
17. Financial Statement Analysis
,Horngren's Accounting: The Financial Chapters, 14e (Miller-Nobles)
Chapter F:1 Accounting And The Business Environment
Learning Objective F:1-1
Accounting Is The Information System That Measures Business Activities, Processes The Information
Into Reports, And Communicates The Results To Decision Makers.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
The Knowledge Of Accounting Is Rarely Used To Help Make Business And Personal Financial
Decisions. Answer: FALSE
Explanation: The Knowledge Of Accounting Is Used Daily To Assist In Making Decisions For
Both Businesses And Personal Items.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
Accounting Starts With Economic Activities That Accountants Review And Evaluate Using Critical
Thinking And Judgment To Create Useful Information That Helps Individuals Make Good Decisions.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
Accounting Is Referred To As The Language Of Business Because It Is The Method Of
Communicating Business Information To Decision Makers.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
1
, A Model Called The ________ Was Created To Help Students And The Public Understand What
Accounting
Is.
A) Decision Making Model
B) Business Model
C) Pathways Vision Model
D) Cost Model
Answer: C
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
The Pathways Vision Model Emphasizes That Good Decisions Have An Impact On ________.
Accounting Judgments And Economic Activity
Accounting Judgments Only
Economic Activity Only
Neither Accounting Judgments Nor Economic
Activity Answer: A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Why Is Accounting Important? (H1)
Managerial Accounting Focuses On Providing Information For External Decision
Makers. Answer: FALSE
Explanation: Managerial Accounting Focuses On Providing Information For Internal Decision Makers.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Investors Primarily Use Managerial Accounting Information For Decision-Making
Purposes. Answer: FALSE
Explanation: External Users (Investors) Use Financial Accounting Information.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
2
, A Creditor Is A Person Who Owes Money To The
Business. Answer: FALSE
Explanation: A Creditor Is A Person To Whom A Business Owes Money.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Income Tax Is Calculated Using Accounting Information.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Financial Accounting Focuses On Information For Decision Makers Outside Of The Business,
Such As Creditors And Taxing Authorities.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Business Owners Use Accounting Information To Set Goals, Evaluate Progress Toward Those
Goals, And Make Adjustments When Needed.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Outside Investors Ordinarily Use Financial Accounting Information To Decide Whether Or Not To
Invest In A Business.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
3
, A Creditor Is Any Person Who Has An Ownership Interest In A
Business. Answer: FALSE
Explanation: A Creditor Is Any Person To Whom Money Is Owed.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Managerial Accounting Focuses On Information Needed By Lenders, Customers, And The
Federal Government.
Answer: FALSE
Explanation: Financial Accounting Focuses On Providing Information For External Decision Makers,
Such As Lenders, Customers, And The Federal Government.
Diff: 1
LO: F:1-1
AACSB: Interpersonal Relations And Teamwork
AICPA Functional: Reporting
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Any Person Or Business To Whom A Business Owes Money Is Called The Business's Creditor.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Decision Makers Are Looking For An International Accounting Language Because The Most
Significant Change In The Business World In The Last Decade Has Been The Huge Increase In
International Commerce. Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Reporting
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
4
, Managerial Accounting Provides Information To
________. A) Internal Decision Makers
B) Outside Investors And
Lenders C) Creditors
D) Taxing
Authorities Answer:
A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
The Field Of Accounting That Focuses On Providing Information For External Decision Makers Is
________.
A) Managerial
Accounting B) Financial
Accounting C) Cost
Accounting
D) Nonmonetary
Accounting Answer: B
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
The Field Of Accounting That Focuses On Providing Information For Internal Decision Makers Is
________.
A) Managerial
Accounting B) Financial
Accounting
C) Nonmonetary
Accounting D)
Governmental Accounting
Answer: A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2 : Decision Makers: The Users Of Accounting Information
,5
, Which Of The Following Users Would Rely On Managerial Accounting Information For Decision-
Making Purposes?
A) Potential
Investors B)
Creditors
C) Customers
D) Company
Managers Answer: D
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2 : Decision Makers: The Users Of Accounting Information
Which Of The Following Is A Decision Made By An Internal User?
Should We Lend Money To The Business?
How Much Money Should The Business Budget For Production?
Should I Invest In The Business?
All Of The Above Are Correct.
Answer: B
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Decision Makers: The Users Of Accounting Information
Financial Analysts Perform Reviews Of Companies To Ensure Compliance To Rules And
Regulations. Answer: FALSE
Explanation: Auditors Perform Reviews Of Companies To Ensure Compliance To Rules And
Regulations.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
Certified Management Accountants (Cmas) Specialize Only In Financial Management Knowledge
And Work For A Single Company.
Answer: FALSE
Explanation: Certified Management Accountants (Cmas) Specialize In Accounting And Financial
Management Knowledge And Typically Work For A Single Company.
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
6
, Certified Public Accountants (Cpas) Are Licensed Professional Accountants Who Serve The
General Public.
Answer: TRUE
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
________ Are Professional Accountants Who Serve The General Public, Not One Particular
Company. A) Certified Public Accountants
B) Financial Managers
C) Internal Auditors
D) Controllers
Answer: A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
Accountants Generally Work Either In Public, Private Or ________ Accounting.
Governmental
Personal
Managerial
State
Answer: A
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
________ Typically Work In A Manufacturing Business And Help Analyze Accounting
Data. A) Financial Analysts
B) Cost
Accountants C)
Internal Auditors
D) Controllers
Answer: B
Diff: 1
LO: F:1-1
AACSB: Application Of Knowledge
AICPA Functional: Measurement
PE Question Type: Concept
H2 : Accounting Mapers
7
