D196 Questions and Answers Rated A
Accounting plays a vital role in the decision-making process. Which action is the first step in the
decision-making process?
Identify the issue.
The money that a company needs to bu
...
D196 Questions and Answers Rated A
Accounting plays a vital role in the decision-making process. Which action is the first step in the
decision-making process?
Identify the issue.
The money that a company needs to buy its land, pay its employees, and buy its supplies is called
capital. What are the potential sources of capital for a business?
Investors, creditors, and retained business earnings
True or False: Accountants measure and communicate the results of business activities
True
What is the correct summary sequence in the accounting cycle?
Analyze, Record, Summarize, Prepare
Business documents, such as a sales invoice, a purchase order, or a check stub, are an important
part of the accounting process. From an accounting cycle standpoint, what is purpose of business
documents?
To confirm that a transaction has occurred
What is the purpose of the financial accounting cycle?
To turn transactions into financial statements and provide useful financial information for
decision makers
A new product line manager approaches the accounting department in order to understand the
past performance of the product line he has been asked to manage in the future. Which role of
accounting involves obtaining and using financial information to determine the financial health
and performance of a business or product line?
Evaluation
You read in the newspaper that a local company you are familiar with has been found guilty in
court of publishing financial statements that are false and misleading to users of those financial
statements. In this situation, what could the American Institute of Certified Public Accountants
(AICPA) do in response to the accountants who were found guilty of unethical conduct in
accounting practices?
Implement professional sanctions
Alliah Company just released its public accounting data for 20X9. Which user of accounting
information will monitor this data to ensure that the company is providing sufficient information
for investors?
Government agencies, SEC
Anika is considering investing in a tech company that is known for developing smart home
appliances. Before investing, Anika first wants to ensure that the company's past financial
performance has been satisfactory and that the company manages its cash flows well. What type
of accounting information would provide this evidence for Anika?
Financial reports
Your boss approaches you with a concerning letter from the IRS and asks you to explain the role
of the IRS in regulating accounting standards. Based on the role of the IRS, what could be the
problem detailed in the letter?
The company has not filed its taxes in accordance with the law.
In what way do accountants have an economic incentive to conduct themselves ethically?
The value of the information produced by accountants is related to the confidence that users have
in the reliability of that information.
How is it possible for an accountant to intentionally deceive financial statement users and yet
still technically be in compliance with generally accepted accounting principles (GAAP)?
There is flexibility inherent in the assumptions underlying the preparation of financial
statements.
What is the role of the IASB in regulating accounting standards?
Establish international accounting standards
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