Albrecht SM 2PP MCQ.docVIP

14 Chapters’ MCQ Chapter 1 1. The functions of an accounting system include all of the following except to: b. handle routine bookkeeping tasks. c. structure information so that it can be used to evaluate performance of a business. d. analyze transactions. 2 Accounting information is useful for several kinds of decisions. For which decision situation would accounting information NOT be useful? a. Bankers evaluating the riskiness of loans. b. Corporate managers controlling costs. c. Production managers evaluating the quality of materials used in manufacturing. d. Corporate managers setting prices. 3 The primary users of external financial reports are: a. those who direct day-to-day operations of a business enterprise. b. individuals who have an economic interest in the firm but who are not part of management. c. managers of an enterprise who plan, implement plans, and control costs. d. none of the above. 4 Which primary financial statement shows a business enterprises resources, obligations, and equities? a. Statement of cash flows b. Balance sheet c. Income statement d. Statement of retained earnings 5 Which primary financial statement shows a business enterprises excess of revenues over expenses? a. Statement of cash flows b. Balance sheet c. Income statement d. Statement of retained earnings 6 Which of the following is NOT true of the Securities and Exchange Commission (SEC)? a. The SEC is charged with protecting investors from losing money. b. Congress has given the SEC specific legal authority to establish accounting standards. c. As a result of the accounting scandals of 2001-2002, the SEC was given more authority to set standards. d. The SEC could take over the role of standard setting in accounting if the FASB loses credibility. 7 Which of the following is NOT true regarding the International Accounting Standards Board (IASB)? a. IASB standards