1.As a potential equity investor, what information about a company would you be least interested in prior to making an investment decision? Whether they have positive cash flows? What differentiates them from their competition? What are the employee benefits and compensation packages? Whether they are generating a profit?

2.The primary reason that financial accounting and managerial accounting have somewhat different objectives is because they need information in different geographic locations provide information for different decisions need information at different times need information in different formats

3.Which of the following organizations has legal authority to prescribe accounting principles and reporting practices for all corporations issuing publicly traded securities within the U.S. capital markets? Securities and Exchange Commission Financial Accounting Standards Board Committee on Accounting Procedure Accounting Principles Board

4.Which organization has the most legal authority? Governmental Accounting Standards Board Accounting Standards Executive Committee Financial Accounting Standards Board Securities and Exchange Commission

5.Three major organizations in the private and public sector develop U.S. and International Financial Reporting Standards. They include all of the following except the SEC (Securities and Exchange Commission). EU (European Union). FASB (Financial Accounting Standards Board). IASB (International Accounting Standards Board).

6.The Securities and Exchange Commission has the legal authority to prescribe accounting principles and reporting practices for all companies issuing publicly traded securities all companies issuing any type of securities all companies all corporations

7.Which of the following is not a major standard-setting body responsible for the establishment of U.S. and International Financial Reporting Standards? SEC (Securities Exchange Commission) FASB (Financial Accounting Standards Board) IASB (International Accounting Standards Board) PCAOB (Public Company Accounting Oversight Board)

8.While formally the SEC is charged with the responsibility for establishing accounting principles to be followed in the preparation of SEC filings, the impact of the SEC generally has been in guiding the development of stock exchanges. ineffective in controlling foreign corporations and investors. in its informal review and approval of standards developed in the private sector prior to their release. in its assistance to Congress with the development of tax law.

9.The Securities Exchange Act of 1934 established extensive reporting requirements for listed companies. Which is not a commonly required report? Form 10-Q. An extensive quarterly report, including financial statements. Form 10-K. An extensive annual report, including financial statements Form S-2. A registration statement Form 8-K. A report used to describe significant events that may affect the company.

10.Beginning in 1938 and extending to the present, which is the correct sequence of accounting rule-making bodies? CAP-FASB-APB FASB-APB-CAP CAP-APB-FASB APB-CAP-FASB

11.Which of the following statements about the FASB Accounting Standards Codification is false? The Codification is currently the only authoritative source of U.S. GAAP. The six levels contained within the Codification framework are hierarchical in nature, such that the higher levels are considered to be more authoritative than the lower levels. The framework of the Codification contains six levels, which are increasingly more specific. The purpose of creating the Codification was to simplify user access to authoritative U.S. GAAP.

12.Using an allowance method of accounting to recognize uncollectible accounts receivable is an application of which accounting convention? revenue recognition historical cost matching principle period of time

13.A company that uses accounting methods in preparing its tax returns that differ from the accounting methods used to prepare its financial statements is probably guilty of tax evasion in violation of the consistency principle not necessarily violating either the income tax laws or generally accepted accounting principles in violation of the relevance assumption

14.The use of the historical cost principle is justified because the resulting information has the qualitative characteristics of neutrality and materiality timeliness and relevance verifiability and predictive value neutrality and verifiability

15.Which of the following is a temporary account? Accounts Receivable Purchases Returns and Allowances Accumulated Depreciation Retained Earnings