1. What is the effect of a company's accounting department maintaining highethical
standards?
-The company can report more favorable results in its financial statements.
-The company's accounting information will decr
...
1. What is the effect of a company's accounting department maintaining highethical
standards?
-The company can report more favorable results in its financial statements.
-The company's accounting information will decrease in value.
-The company can hire fewer accountants to do the same amount of work.
-The company's accounting information will increase in value.
Answer: The company'saccounting information will increase in value.
2. Why might employees be interested in their company'sfinancial accountinginformation?
-Financial statement data are used to record long term liabilities.
-Financial statement data provide detailed internal budget information.
-Financial statement data are often used in determining employee bonuses.
-Financial statement data provide item-by-item product cost information.
Answer: Financial statement data are often used in determining employee bonuses.
3. Which group establishes financial accounting rules in the United States?
-Internal Revenue Service (IRS)
-American Institute of Certified Public Accountants (AICPA)
-Financial Accounting Standards Board (FASB)
-International Accounting Standards Board (IASB)
Answer: Financial Accounting Standards Board (FASB)
4. Which report is one of the three primary financial statements?
-Statement of stakeholder funds
-Statement of cash flows
-Statement of the accounting cycle
-Statement of management accounting
Answer: Statement of cash flows
5. A company paid $5,000 cash in advertising costs.
How does this transaction affect the paying company's accounting equation?
-Assets decrease by $5,000; expenses increase by $5,000.
-Assets decrease by $5,000; liabilities increase by $5,000.
-Assets decrease by $5,000; revenues increase by $5,000.
-Assets increase by $5,000; expenses increase by $5,000.
Answer: Assets decrease by $5,000; expenses increase by $5,000.
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