Question 1

The six major steps of the accounting process are analyzing,recording,classifying,summarizing,reporting,and interpreting.

Accepted Answer

The six major steps of the accounting process are indeed analyzing, recording, classifying, summarizing, reporting, and interpreting.

Question 2

A CMA is a Certified Marketing Auditor.

Accepted Answer

A CMA is actually a Certified Management Accountant, not a Certified Marketing Auditor.

Question 3

The Financial Accounting Standards Board develops generally accepted accounting principles to provide some assurance that companies are reporting business activities in a similar manner.

Accepted Answer

The purpose of the Financial Accounting Standards Board is to develop and establish generally accepted accounting principles (GAAP) for businesses to follow. These principles provide consistency and comparability in financial reporting so that stakeholders can make informed decisions.

Question 4

​Interpreting refers to reviewing events that have taken place and determining how they affect a business.
​

Accepted Answer

Interpreting refers to the process of translating spoken or sign language communication from one language to another in real-time, not reviewing past events to determine their impact on a business.

Question 5

A business that purchases a product from another business to sell to customers is called a
A) service business.
B) manufacturing business.
C) merchandising business.
D) nonprofit business.

Accepted Answer

A merchandising business purchases products (or merchandise) from other businesses with the purpose of reselling them to customers. Service businesses sell services instead of physical products. Manufacturing businesses create physical products from raw materials. Nonprofit businesses have a different purpose, as they aim to fulfill a social or environmental mission rather than generating profit.

Question 6

A business that makes a product to sell is called a manufacturing business.

Accepted Answer

A manufacturing business is defined as a business that makes a product to sell, typically in a factory or production facility.

Question 7

Generally accepted accounting principles are procedures and guidelines to be followed in the accounting/reporting process.

Accepted Answer

Generally accepted accounting principles (GAAP) are a set of commonly followed accounting principles, standards, and procedures that must be used by companies when creating financial statements. These guidelines help ensure consistency, accuracy, and transparency in financial reporting.

Question 8

Since financial information is communicated in accounting terms and is the eyes and ears of management,accounting is said to be
A) the language of business.
B) public.
C) private.
D) nonprofit.

Accepted Answer

Accounting is often referred to as the "language of business" because it is used to communicate financial information to stakeholders such as investors, creditors, and management. It is a system of organizing and analyzing financial data in order to make effective business decisions. The other options, public, private, and nonprofit, are not accurate descriptions of what accounting is.

Question 9

A person who reviews the operating and accounting control procedures adopted by management to make sure the controls are adequate and are being followed may be referred to as a(n)
A) bookkeeper.
B) accountant.
C) information processor.
D) internal auditor.

Accepted Answer

An internal auditor is responsible for reviewing and evaluating the operating and accounting control procedures adopted by management to ensure that they are adequate and being followed. A bookkeeper is responsible for recording financial transactions, an accountant is responsible for preparing and analyzing financial statements, and an information processor is responsible for inputting data into an information system.

Question 10

Accountants design accounting information systems and analyze and interpret information.

Accepted Answer

Accountants are involved in designing and implementing accounting information systems in order to generate financial reports and analyze data for decision-making purposes. They also interpret financial information and advise on how to improve business performance.

Question 11

The principal accounting officer of a company is called a public accountant.

Accepted Answer

The principal accounting officer of a company is called the Chief Financial Officer (CFO) or Chief Accounting Officer (CAO). "Public accountant" typically refers to an accountant who provides services to the public, rather than being employed by a specific company.

Question 12

Since financial information is communicated in accounting terms,accounting is said to be the "language of business."

Accepted Answer

Accounting is called the "language of business" because it is used to communicate financial information in a way that can be understood by stakeholders such as investors, creditors, and management.

Question 13

A partnership is owned by stockholders or shareholders and is managed by them.

Accepted Answer

A partnership is typically not owned by stockholders or shareholders, but rather by the partners themselves. Management responsibilities are also typically shared by the partners.

Question 14

Stockholders may have very little influence on business decisions.

Accepted Answer

While stockholders have a financial stake in the company, they may not have a significant say in business decisions unless they hold a majority of shares or have been given voting rights. This is because decision-making power is typically vested in the company's board of directors and executive management team.

Question 15

A public accountant can achieve professional recognition as a Certified Public Accountant by meeting certain educational and experience requirements as determined by each state.

Accepted Answer

This is true. Each state has its own set of requirements for becoming a Certified Public Accountant (CPA), but they generally involve completing specific education and experience requirements, passing an exam, and meeting certain ethical standards. Upon meeting these requirements, an accountant can earn the professional recognition of CPA.

Question 16

The purpose of accounting is to provide financial information about the current operations and financial conditions of a business to individuals and organizations.

Accepted Answer

The purpose of accounting is indeed to provide financial information about a business to interested parties such as investors, creditors, government agencies, and internal stakeholders. This information helps in making informed decisions about the business's current financial health and future prospects.

Question 17

Writing or using one of the latest technological advances to enter a transaction in the accounting records is called summarizing.

Accepted Answer

Summarizing refers to the process of summarizing several transactions or pieces of information into one entry in the accounting records. It does not involve the use of technological advances.

Question 18

Which of the following types of businesses is owned by stockholders?
A) proprietorship
B) corporation
C) partnership with more than ten partners
D) partnership with only two partners

Accepted Answer

Corporations are the only type of business that are owned by stockholders. A proprietorship is owned by an individual, while partnerships are owned by multiple individuals who share profits and liabilities. However, a corporation is a separate legal entity that issues shares of stock to shareholders, who become partial owners of the company.

Question 19

A corporation is usually managed by
A) stockholders.
B) a professional manager.
C) a proprietor.
D) two or more partners.

Accepted Answer

A corporation is typically managed by a professional manager or a board of directors who are appointed by the stockholders. Stockholders own shares of the company but do not necessarily manage it directly. Proprietors and partners typically manage their own businesses.

Question 20

Cost accounting is used to develop a financial plan for a company.

Accepted Answer

Cost accounting is used to measure, analyze, and report financial and nonfinancial information related to the costs of acquiring or using resources in an organization. It is primarily used for internal management rather than developing a financial plan.

Quiz 1: Introduction to Accounting

The six major steps of the accounting process are analyzing,recording,classifying,summarizing,reporting,and interpreting.

A CMA is a Certified Marketing Auditor.

The Financial Accounting Standards Board develops generally accepted accounting principles to provide some assurance that companies are reporting business activities in a similar manner.

​Interpreting refers to reviewing events that have taken place and determining how they affect a business. ​

A business that purchases a product from another business to sell to customers is called a

A business that makes a product to sell is called a manufacturing business.

Generally accepted accounting principles are procedures and guidelines to be followed in the accounting/reporting process.

Since financial information is communicated in accounting terms and is the eyes and ears of management,accounting is said to be

A person who reviews the operating and accounting control procedures adopted by management to make sure the controls are adequate and are being followed may be referred to as a(n)