poa 01.01

Accountants refer to an economic event as a

• a. purchase
• b. sale
• c. transaction
• d. change in ownership

The process of recording transactions has become more efficient because

• a. fewer events can be quantified in financial terms
• b. computers are used in processing business events
• c. more people have been hired to record business transactions
• d. business events are recorded only at the end of the year

Communication of economic events is the part of the accounting process that involves

• a. identifying economic events
• b. quantifying transactions into dollars and cents
• c. preparing accounting reports
• d. recording and classifying information

Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?

• a. The appointment of a new CPA firm to perform an audit
• b. The purchase of a new computer
• c. The sale of store equipment
• d. Payment of income taxes

The use of computers in recording business events

• a. has made the recording process more efficient
• b. does not use the same principles as manual accounting systems
• c. has greatly impacted the identification stage of the accounting process
• d. is economical only for large businesses

The accounting process involves all of the following except

• a. identifying economic transactions that are relevant to the business
• b. communicating financial information to users by preparing financial reports
• c. recording nonquantifiable economic events
• d. analyzing and interpreting financial reports

The accounting process is correctly sequenced as

• a. identification, communication, recording
• b. recording, communication, identification
• c. identification, recording, communication
• d. communication, recording, identification

Which of the following techniques are not used by accountants to interpret and report financial information?

• a. Graphs
• b. Special memos for each class of external users
• c. Charts
• d. Ratios

Which of the following would not be considered an internal user of accounting data for the XYZ Company?

• a. President of the company
• b. Production manager
• c. Merchandise inventory clerk
• d. President of the employees' labor union

Which of the following would not be considered an external user of accounting data for the XYZ Company?

• a. Internal Revenue Service Agent
• b. Management
• c. Creditors
• d. Customers