Acc3001 Quiz 2

Financial accounting information ________.

• should be incomplete in order to confuse competitors

• should be prepared differently by each company

• provides investors guarantees about the future

• summarizes what has already occurred

External users of financial accounting information include all of the following except ________.

• lenders such as bankers

• governmental agencies such as the IRS

• employees of a business

• potential investors

Which of the following groups would have access to managerial accounting information?

• bankers

• investors

• competitors of the business

• managers

All of the following are examples of managerial accounting activities except ________.

• preparing external financial statements in compliance with GAAP

• deciding whether or not to use automation

• making equipment repair or replacement decisions

• deciding whether or not to use automation

Stockholders can best be defined as which of the following?

• investors who lend money to a business for a short period of time

• investors who lend money to a business for a long period of time

• investors who purchase an ownership in the business

• analysts who rate the financial performance of the business

Typical accounting tasks include all of the following tasks except ________.

• auditing

• recording and tracking costs

• tax compliance and planning

• consulting

• purchasing direct materials

The accounting equation is expressed as ________.

• Assets + Liabilities = Owner’s Equity

• Assets – Noncurrent Assets = Liabilities

• Assets = Liabilities + Investments by Owners

• Assets = Liabilities + Owner’s Equity

Which of the following decreases owner’s equity?

• investments by owners

• losses

• gains

• short-term loans

Exchanges of assets for assets have what effect on equity?

• increase equity

• may have no impact on equity

• decrease equity

• There is no relationship between assets and equity.

All of the following increase owner’s equity except for which one?

• gains

• investments by owners

• revenues

• acquisitions of assets by incurring liabilities