QUESTION Why do accounting standards require consistency and comparability? A) so that companies can be as profitable as possible B) so that companies’ financial states can be measured meaningfully C) so that companies’ financial results are as reliable as possible D) so that foreign businesses can make sense of American business practices E) so that […]
QUESTION Which of the following is NOT among the standards of the generally accepted accounting principles? A) to ensure that financial statements are relevant B) to ensure that financial statements are reliable C) to ensure that financial statements are comparable D) to ensure that financial statements are affordable E) to ensure that financial statements are […]
QUESTION Shawna, a forensic accountant, has been hired by a large company to test the company’s financial statements. There are questions about the accuracy of records that were entered by bookkeepers. Which of the following steps of the accounting process will Shawna most likely focus on? A) putting transactions into a ledger B) putting journal […]
QUESTION What is the name given to a record book or computer program containing the daily record of a firm’s transactions? A) double-entry book B) accounting log C) financial report D) journal E) ledger ANSWER Answer: D Explanation: D) A journal is a record book or computer program containing the daily record of a […]
QUESTION Why is the format for recording each journal entry known as double-entry bookkeeping? A) because two accountants work together on the journal B) because the journal entries are reviewed twice daily C) because each transaction is recorded in two different accounts D) because photocopies are always taken of each journal page E) because firms […]
QUESTION Which of the following is TRUE of the Financial Accounting Standards Board (FASB)? A) It is a federal agency. B) It is regulated by the government. C) It delegates the primary responsibility for GAAP to the SEC. D) It is responsible for only two of the four generally accepted accounting principles. E) It establishes, […]
QUESTION Which of the following is one of the organizations in which the authority for the GAAP rests? A) Securities and Exchange Commission B) Governmental Accounting Board of Standards C) Government Accountability Office D) Federal Accounting Board of Management E) Congress ANSWER Answer: A Explanation: A) The authority for the GAAP is with two […]
QUESTION Suppose the total of all debits is less than the total of all credits in a double-entry bookkeeping journal. What must be the explanation for this? A) An error has occurred. B) There has been a profit for the day. C) There has been a loss for the day. D) GAAP standards were not […]
QUESTION What is the name given to the specialized record book or computer program that contains summaries of all journal transactions by category? A) trial balance B) balance sheet C) ledger D) income statement E) statement of cash-flows ANSWER Answer: C Explanation: C) The ledger is the specialized record book or computer program that […]
QUESTION Which of the following is NOT one of the reports or financial statements the bookkeeper issues at the end of every accounting period? A) balance sheet B) income statement C) statement of cash flows D) income tax return E) profit-and-loss statement ANSWER Answer: D Explanation: D) Once the bookkeeper has the correct figures, […]
