3.01 Accounting
Which is excluded from the expense section of an income statement?
A. interest
B. revenues
C. supplies
D. utilities
B. revenues
Dwinda is a managerial accountant at Zale and Company. Which task would she perform at her company?
A. auditing
B. purchasing
C. developing budgets
D. creating balance sheets
C. developing budgets
In Keindra’s business plan, where will she place her evidence of customer interest in her new product?
A. Appendices
B. Market Analysis
C. Product(s) Offered
D. Strategy and Implementation
B. Market Analysis
William wants to include information regarding his sales force in his business plan. Which section should he put this in?
A. Market Analysis
B. Executive Summary
C. Company Description
D. Strategy and Implementation
D. Strategy and Implementation
The FASB is a private company that makes accounting rules, while the SEC is a governmental agency that regulates businesses listed on the stock market. The FASB and SEC work together as a:
A. cooperative agency.
B. public-private partnership.
C. semi-governmental agency.
D. government-public partnership.
B. public-private partnership.
When Jack examines the balance sheet of a company, he sees a “picture” of the company's:
A. accounting method.
B. financial situation.
C. income statement.
D. pre-tax profit.
B. financial situation.
Ethical accounting behavior involves using:
A. due care.
B. passive concern.
C. flexible standards.
D. personal preferences.
A. due care.
How can a start-up business benefit from writing a business plan?
A. by defining managers’ roles
B. by preparing for an expansion
C. by placing a value on the business
D. by assessing a new product or promotion
A. by defining managers’ roles
The patents and copyrights of a business are usually mentioned in which component of the business plan?
A. Market Analysis
B. Management Plan
C. Product(s) Offered
D. Strategy and Implementation
C. Product(s) Offered
The main purpose of the Sarbanes-Oxley Act of 2002 is to:
A. hold CPAs personally responsible for errors in accounting audits.
B. hold CEOs personally responsible for errors in accounting audits.
C. hold the boards of directors personally responsible for errors in accounting audits.
D. allow each business to determine who will be personally responsible for errors in accounting audits.
B. hold CEOs personally responsible for errors in accounting audits.
To balance the balance sheet, assets must equal:
A. income.
B. liabilities.
C. equity plus income.
D. liabilities plus equity.
D. liabilities plus equity.
Maintaining open and honest communication in financial statements is related to the principle of:
A. due care.
B. responsibility.
C. full disclosure.
D. confidentiality.
C. full disclosure.
In what way can an existing business benefit from writing a business plan?
A. begin operations
B. identify managers’ roles
C. acquire funding for a new idea
D. determine how to distribute profits
C. acquire funding for a new idea
Carmella plans to put the qualifications of key managers in her business plan. Which section should she include them in?
A. Appendices
B. Management Plan
C. Executive Summary
D. Company Description
B. Management Plan
What independent federal government agency is responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation?
A. FASB
B. GAAP
C. PCAOB
D. SEC
D. SEC
The primary purpose of the accounting process in business is to track:
A. warehousing needs.
B. advertising activities.
C. financial transactions.
D. production equipment.
C. financial transactions.
Which is true about ethical accounting principles?
A. Ethical accounting principles replace rules and regulations.
B. Ethical principles are only designed for financial accountants.
C. Common ethical principles can guide all types of accountants.
D. Accountants do not benefit from following ethical accounting principles.
C. Common ethical principles can guide all types of accountants.
Before Lynnette takes her new product to a mass audience, she should write a business plan to:
A. identify managers’ roles.
B. place a value on the business.
C. assess a new product or promotion.
D. obtain a specific contract or agreement.
C. assess a new product or promotion.
Which section of the business plan makes it easy for readers to locate sections they want to read or review?
A. Cover Page
B. Table of Contents
C. Product(s) Offered
D. Company Description
B. Table of Contents
Which must be registered with the SEC before being eligible to be sold to investors?
A. a position on the board of directors
B. issues of securities offered in local offices
C. the distribution of dividends to stockholders
D. issues of securities offered in interstate commerce, through the mail, or on the Internet
D. issues of securities offered in interstate commerce, through the mail, or on the Internet
The "Management Discussion and Analysis" section of the annual report:
A. provides a ten-year summary of financial figures.
B. reviews the results of company operations.
C. explains what the company sells.
D. includes a letter to shareholders.
B. reviews the results of company operations.
3.05 Legal Considerations for Accounting
A nonprofit organization responsible for setting the accounting standards in the United States is the:
A. AICPA.
B. FASB.
C. GAAP.
D. SEC.
B. FASB.
The part of the business plan that gives an overview of the entire document is the:
A. appendices.
B. table of contents.
C. executive summary.
D. company description.
C. executive summary.
Personnel costs should be addressed in which component of the business plan?
A. Appendices
B. Management Plan
C. Company Description
D. Strategy and Implementation
B. Management Plan
Which three reports are mandatory for every public company to file?
A. income statement, balance sheet, and statement of cash flows
B. income statement, balance sheet, and owner’s equity statement
C. income statement, cost of goods sold, and statement of cash flows
D. balance sheet, owner’s equity statement, and statement of cash flows
A. income statement, balance sheet, and statement of cash flows