Business Accounting

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CHAPTER 1

Accounting: An Overview and Analysis

MULTIPLE CHOICE QUESTIONS

41.Accountants refer to an economic event as a
a.purchase.
b.sale.
c.transaction.
d.change in ownership.

42.The process of recording transactions has become more efficient because a.fewer events can be quantified in financial terms.
b.computers are used in processing business events.
c.more people have been hired to record business transactions. d.business events are recorded only at the end of the year.

43.Communication of economic events is the part of the accounting process that involves a.identifying economic events.
b.quantifying transactions into dollars and cents.
c.preparing accounting reports.
d.recording and classifying information.

44.Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction? a.The appointment of a new CPA firm to perform an audit.
b.The purchase of a new computer.
c.The sale of store equipment.
d.Payment of income taxes.

45.The use of computers in recording business events
a.has made the recording process more efficient.
b.does not use the same principles as manual accounting systems. c.has greatly impacted the identification stage of the accounting process. d.is economical only for large businesses.

46.The accounting process involves all of the following except a.identifying economic transactions that are relevant to the business. b.communicating financial information to users by preparing financial reports. c.recording nonquantifiable economic events.

d.analyzing and interpreting financial reports.

47.The accounting process is correctly sequenced as
a.identification, communication, recording.
b.recording, communication, identification.
c.identification, recording, communication.
d.communication, recording, identification.

48.Which of the following techniques are not used by accountants to interpret and report financial information? a.Graphs
b.Special memos for each class of external users
c.Charts
d.Ratios

49.Which of the following would not be considered an internal user of accounting data for the XYZ Company? a.President of the company
b.Production manager
c.Merchandise inventory clerk
d.President of the employees' labor union

50.Which of the following would not be considered an external user of accounting data for the XYZ Company? a.Internal Revenue Service Agent
b.Management
c.Creditors
d.Customers

51.Which of the following would not be considered internal users of accounting data for a company? a.The president of a company
b.The controller of a company
c.Creditors of a company
d.Salesmen of the company

52.Which of the following is an external user of accounting information? a.Labor unions
b.Finance directors
c.Company officers
d.Managers

53.Which one of the following is not an external user of accounting information? a.Regulatory agencies
b.Customers
c.Investors
d.All of these are external users

54.Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process? a.Identification
b.Communication
c.Recording
d.Analysis

a55.All of the following are services offered by public accountants except a.budgeting.
b.auditing.
c.tax planning.
d.consulting.

a56.Which list below best describes the major services performed by public accountants? a.Bookkeeping, mergers, budgets
b.Employee training, auditing, bookkeeping
c.Auditing, taxation, management consulting
d.Cost accounting, production scheduling, recruiting

a57.Preparing tax returns and engaging in tax planning is performed by a.public accountants only.
b.private accountants only.
c.both public and private accountants.
d.IRS accountants only....
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