Chapter 1 Intro to Accounting

Name the professional ethic:

To be straightforward and honest in all professional relationships.

Which of the following are stakeholders?

• Bank

• Government

• Employees

• Suppliers

• Customers

Answer explanation

The bank is not a stakeholder unless the business lends money from the bank. "Lender" is a stakeholder, not "Bank".

The manager works for the business

and devises strategic plans to run the business efficiently.

He considers whether to....

• invest in the business or sell the business

• find ways to improve the performance of the business

• grant loan to the business

• sell to the business on credit

An accountant with integrity is ______________ and honest in all professional relationships.

An objective accountant will not let bias,

conflict of interest or undue influence of others

override his professional _________.

The role of the accountants is to...

• prepare and provide accounting information

• make decision

• be stewards of the business

Answer explanation

Accountants are stewards of the business, to maintain the accounts. Accountants are not the decision-makers.

Accounting entity theory states that

the activities of a business are _________ from the actions of the owner.

Accountants should NOT...

• prepare accounting records that contain false information

• accept a gift or preferential treatment

• select a family member as vendor to benefit financially

• report a higher profit due to threat by the boss

Name this accounting theory:

Only business transactions that can be measured in monetary terms are recorded.

• Objectivity theory

• Accounting entity theory

• Historical cost theory

• Monetary theory

An accountant with integrity is straightforward and ______ in all professional relationships.