QUESTION The advent of computers and accounting software has made the services of accountants unnecessary. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Although computers and accounting have vastly speeded up and simplified accounting, accountants are still necessary and to some extent have been freed up to more productively focus […]
QUESTION The purpose of double-entry bookkeeping is to act as a check on errors. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Double-entry bookkeeping acts as a check on errors because each transaction is recorded in two different accounts: both as a credit and a debit.
QUESTION Accounting principles used by different accountants may vary. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Accounting relies on generally accepted accounting principles as standards to ensure financial statements are relevant, reliable, consistent, and comparable.
QUESTION The accounting process begins with assessing the firm’s financial condition using ratio analysis. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The last phase of the accounting process is to assess the firm’s financial condition using ratio analysis. The accounting process begins by collecting the results of bookkeeping—that is, […]
QUESTION American accounting standards are becoming the basis for a global set of standards. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The SEC now allows some large American companies to use the international accounting standards, established by the International Accounting Standards Board. The purpose of this and other moves […]
QUESTION In double-entry bookkeeping, each entry is recorded as twice as much the original amount. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: With double-entry bookkeeping, the same entry is recorded twice but as both a credit and a debit. The total of all debits must equal the total of […]
QUESTION Financial reports may be issued by a company at any time of the year. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Financial reports may be done monthly, quarterly, semiannually, or yearly as an annual report.
QUESTION One of the major types of financial statement is a liability report. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Types of financial statements include balance sheets, income statements, and statements of cash flows.
QUESTION Assets may include unsold merchandise a company has on hand. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Assets include cash on hand, accounts receivable, marketable securities, and merchandise inventory.
QUESTION The U. S. government’s fiscal year begins on July 1 and ends on June 30. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The U.S. government’s fiscal year begins on October 1 and ends on September 30.
