Financial Accounting 15th Edition by Williams
While many texts characterize themselves as having either a “user” approach or a “preparer” approach, Williams’ Financial Accounting is written for faculty who want to strike a balance between these approaches. Business majors will find relevance in the “Ethics, Fraud & Corporate Governance,” “Your Turn” and “Case in Point” boxes throughout the chapters while accounting majors will receive a firm grounding in accounting basics that will prepare them for their intermediate course.
Free Test Bank for Financial Accounting 15th Edition Part 2 by Williams
Test Bank for Financial Accounting 15th Edition Part 1 by Williams
A complete set of financial statements for Citywide Company, at December 31, 2009, would include each of the following, except:
A. Balance sheet as of December 31, 2009.
B. Income statement for the year ended December 31, 2009.
C. Statement of projected cash flows for 2009.
D. Notes containing additional information that is useful in interpreting the financial statements.
One purpose of generally accepted accounting principles is to make accounting information prepared by different companies more comparable.
True
False
The Sarbanes-Oxley Act places responsibility on CEOs and CFOs of companies to certify the fairness of company's financial statements. The Act also created the Public Company Accounting Oversight Board which oversees the public accounting profession.
True
False
The tailoring of an accounting report to meet the needs of a specific decision maker is more characteristic of financial accounting reports than of management accounting reports.
True
False
Investors are individuals and other enterprises that have provided equity to the reporting enterprise.
True
False
Today, the most authoritative source of generally accepted accounting principles is the American Accounting Association.
True
False
Financial statements are prepared:
A. Only for publicly owned business organizations.
B. For corporations, but not for sole proprietorships or partnerships.
C. Primarily for the benefit of persons outside of the business organization.
D. In either monetary or nonmonetary terms, depending upon the need of the decision maker.
Although accounting information is used by a wide variety of external parties, financial
reporting is primarily directed toward the informational needs of:
A. Investors and creditors.
B. Government agencies such as the Internal Revenue Service.
C. Customers.
D. Trade associations and labor unions.
Which organization best serves the professional needs of a CPA?
A. FASB.
B. AICPA.
C. SEC.
D. AAA.
Financial statements must be prepared for which time period?
A. One year.
B. Less than one year.
C. More than one year.
D. Any time period.
The CPA examination is administered by the General Accounting Office of the U. S. Government.
True
False
The body created by the Sarbanes Oxley Act and charged with oversight of the accounting profession is the:
A. Public Company Accounting Oversight Board.
B. Auditing Standards Board.
C. International Accounting Standards Board.
D. Security and Exchange Commission.
The Code of Ethics of the AICPA calls for a commitment to ethical behavior but not at the sacrifice of personal advantage.
True
False
The general purpose financial statements prepared annually by a corporation would not include the:
A. Balance sheet.
B. Income tax return.
C. Income statement.
D. Statement of cash flows.
Generally accepted accounting principles were established by the American Accounting Association in 1934 and are updated annually by Congress.
True
False
The basic purpose of an audit is to:
A. Assure financial statements are in conformity with GAAP.
B. Provide as much useful information to decision makers as possible, regardless of cost.
C. Record changes in the financial position of an organization by applying the concepts of double entry accounting.
D. Meet an organization's need for accounting information as efficiently as possible.
Management accounting information is oriented toward the future while financial accounting information is historical in nature.
True
False
The field of accounting may best be described as:
A. Recording the financial transactions of an economic entity.
B. Developing information in conformity with generally accepted accounting principles.
C. The art of interpreting, measuring, and describing economic activity.
D. Developing the information required for the preparation of income tax returns.
It is the function of management accounting to perform the following activities, except:
A. Financial forecasts.
B. Cost accounting.
C. Internal audits.
D. Audited financial statements.
Which of the following is not a basic function of an accounting system?
A. To interpret and record the effects of business transactions.
B. To classify the effects of similar transactions in a manner that permits determination of various totals and subtotals useful to management.
C. To ensure that a business organization will be managed profitably.
D. To summarize and communicate information to decision makers.
Generally accepted accounting principles:
A. Are based on official decrees only.
B. Are based on tradition only.
C. Are based on an accountant's experience only.
D. May change over time.
The Sarbanes-Oxley Act of 2002 created:
A. The Security and Exchange Commission.
B. The Financial Accounting Standards Board.
C. The Public Company Accounting Oversight Board.
D. The Income Tax Return Overview Board.
Investors may be described as:
A. Individuals and enterprises that have provided credit to a reporting entity.
B. Individuals and enterprises that own a reporting entity business.
C. Anyone that has an interest in the results of the operations of the reporting entity.
D. Those whose primary economic activity consists of buying and selling stocks and bonds.
The internal control structure of an organization has no relationship to the reliability of accounting information.
True
False
The Code of Ethics of the AICPA calls for a member in public practice to be independent in fact and appearance when providing auditing services.
True
False
Career opportunities in accounting exist in public accounting, management accounting, governmental accounting and accounting education.
True
False
The Securities and Exchange Commission is instrumental in the development of financial accounting standards.
True
False
A statement of cash flows depicts the way profits have changed during a designated period.
True
False
Public accounting is the segment of the profession where professionals offer audit, tax, and consulting services to clients.
True
False
Financial accounting information is:
A. Designed to assist investors and creditors.
B. Not used by managers and in income tax returns.
C. Called "special-purpose" accounting information.
D. Not applicable to individuals.
The Public Company Accounting Oversight Board is responsible for creating and promoting International Financial Reporting Standards.
True
False
The American Institute of Certified Public Accountants has the legal authority over publicly held corporations to enforce compliance with generally accepted accounting principles.
True
False
The accounting systems of most business organizations:
A. Are tailored to meet the organization's needs for accounting information and the resources available for operating the system.
B. Are similar in design to the journals, ledgers, and worksheets illustrated in this text.
C. Utilize data bases, rather than ledger accounts.
D. Are designed by the CPA firm that performs the annual financial audit.
The IRS tax return is one of the primary financial statements.
True
False
The FASB takes on a responsibility to do the following, except:
A. Set the objectives of financial reporting.
B. Describe the elements of financial statements.
C. Judge disputes between management and the CPA.
D. Determine the criteria for deciding what information to include in financial statements.
An accounting practice can become a "generally accepted accounting principle" through widespread use, even if the practice is not mentioned in the official pronouncements of the accounting standard-setting organizations.
True
False
The content of management accounting reports needs to be presented in conformity with generally accepted accounting principles.
True
False
Which of the following is generally not considered an external user of accounting information?
A. Stockholders of a corporation.
B. Bank lending officers.
C. Financial analysts.
D. Factory managers.
Which of the following is not characteristic of financial accounting?
A. Information used in financial statements is prepared in conformity with generally accepted accounting principles.
B. The information is confidential and is intended for use only by company management.
C. The information is used in a wide variety of business decisions.
D. The information is developed primarily by "private accountants" that is, accountants employed by business organizations.
Investors and creditors are interested in the probability that their original investment or
loan will eventually be returned, and that they will receive a reasonable return while their
funds are invested or borrowed. These expectations are collectively referred to as:
A. Expected profitability.
B. The objectives of financial reporting.
C. Cash flow prospects.
D. Financial position.
Managerial accounting information is designed primarily to assist investors and creditors in deciding how to allocate scarce resources.
True
False
Return on investment is the same as return of investment.
True
False
Information is cost effective when:
A. The information aids management in controlling costs.
B. The information is based upon historical costs, rather than upon estimated market values.
C. The value of the information exceeds the cost of producing it.
D. The information is generated by a computer based accounting system.
The annual financial statements of large corporations such as Microsoft or PepsiCo need not be audited by independent certified public accountants, since these firms maintain large accounting departments as part of their organizations.
True
False
Financial accounting standards issued by the FASB are considered generally accepted accounting principles.
True
False
Overseeing a company's affairs to ensure that the company is managed with the best interest of shareholders in mind is called:
A. Internal control.
B. Financial integrity.
C. Corporate governance.
D. The audit function.
Management accounting refers to the preparation and use of accounting information designed to meet the needs of decision makers outside the business organization.
True
False
The basic purpose of bookkeeping is to:
A. Provide financial information about an economic entity.
B. Develop the types of information best-suited to specific managerial decisions.
C. Record the financial transactions of an economic entity.
D. Determine the taxable income of individuals and business entities.
The statement of financial position and the income statement are one and the same.
True
False
External users of accounting information have a financial interest in an entity but are not involved with the day-to-day operations of the enterprise.
True
False