Chapter 14 - Business Concepts 2

Accounting involves the _____ of the financial activities for firms.

• A. delegating
• B. summarizing
• C. creation
• D. empowering
• E. planning

Managerial accounting provides all of the following financial information EXCEPT:

• A. production reports
• B. payroll summaries
• C. income statements
• D. budgets
• E. monthly sales records

_____ deals with reporting to outsiders. _____ accounting deals with the internal operations of the firm.

• A. Bookkeeping; Financial accounting
• B. Financial accounting; Auditing
• C. Auditing; Managerial accounting
• D. External accounting; Internal accounting
• E. Financial accounting; Managerial accounting

To ensure accuracy and consistency in the way financial information is reported, accountants follow rules known as:

• A. accounting rules and principles
• B. principled accounting procedures
• C. comparable accounting standards
• D. generally accepted accounting principles
• E. financial accounting standards

International accounting standards:

• A. make it easy for an international marketer to rely on global balance sheets and income statements
• B. are supervised by a special agency of the United Nations
• C. all follow GAAP regulations
• D. are required for successful international trade
• E. do not exist

Which of the following statements about the accounting profession is true?

• A. Accountants are typically classified as private or public accountants.
• B. Accountants cannot legally offer management consulting services.
• C. Private accountants serve individuals and organizations on a fee basis.
• D. Public accountants work for local, state, and national agencies.
• E. All of the above statement about the accounting profession are true.

_____ are independent accountants who serve organizations and individuals on a fee basis.

• A. Public auditors
• B. Tax reviewers
• C. Financial strategists
• D. Private accountants
• E. Public accountants

An accountant who has a bachelor's degree, passes a test prepared by the professional organization AICPA, and has a certain number of years of on-the-job training becomes a:

• A. certified public accountant
• B. certified private accountant
• C. professional accountant
• D. financial analyst
• E. certified tax specialist

The Sarbanes-Oxley Act:

• A. set national requirements for becoming a practicing CPA
• B. restricts the types of nonaudit services auditors can provide audit clients
• C. dealt with accounting issues relevant to NAFTA members
• D. mandated the use of international accounting standards
• E. made fraudulent financial reporting illegal

Things of value owned by a firm are called its:

• A. intangibles
• B. owners' equity
• C. tangibles
• D. assets
• E. liabilities