Accounting 1 Final Review

While auditing a company, you find that several of its employees are not satisfied with their jobs. You decide not to write this in the report because of which of the following reasons?

• It is not significant to the management

• It is not part of your job duties

• It is not material information to describe the financial health of the company

• It is juicy gossip you’ll send in an email

Accountants record expenses in the same time period in which they occurred. This is called:

• The economic entity assumption

• The King Kong principle

• The matching principle

• The cost principle

Which of the following pieces of legislation is the result of the Enron scandal?

• Family Leave Act

• Truth in Advertising

• Sarbanes-Oxly Act

• Fair Trade Act

While creating a disaster plan, Accounting decides that it needs off-site data storage. Which of the following would they use to store the information?

• Encryption

• Investors

• Flashdrive

• Cloud storage

Where will you find the total amount that is owed to your business by customers?

• Under accounts receivable on the income statement

• Under accounts receivable on the cash flow statement

• Under accounts receivable on the statement of equity

• Under accounts receivable on the balance sheet

You have invested $30,000 of your money into your company. In what part of the financial statements would you find this information?

• On the balance sheet under liabilities

• On the income statement under current Expenses

• On the balance sheet under equity

• On the income statement under assets

Who is LEAST likely to use accounting reports for decision making?

• Investors

• Senior management

• Banks

• Customers

Which of the following is part of the accounting process?

• Organizing data

• Interpreting data

• Collecting information

• All are part of the accounting process

Who investigated Arthur Andersen and Enron?

• IFSB (International Financial Systems Board)

• SEC (Securities & Exchange Commission)

• GAAP (Government Administrative Action Protocol)

• FASB (Financial Administration System Board)

Ethics are defined as:

• The discipline dealing with what is good and bad and with moral duty and obligation

• The ability to define legal guidelines for your company

• Established code for particular business practices

• The discipline that deals with decision making