College Accounting A Contemporary Approach 4Th Edition by David Haddock – Test Bank

Chapter 01 Accounting: The Language of Business

MULTIPLE CHOICE QUESTIONS

• The purpose of accounting is to provide financial information about an economic or social
  1. True
  2. False

• An accounting system is designed to accumulate and classify data about a company’s financial activities and summarize them in the general
  1. True
  2. False

• In a sole proprietorship, the owner is NOT responsible for the debts of the business if the company is unable to
  1. True
  2. False

• Laws passed by Congress in 1933 and 1934 gave the Securities and Exchange Commission (SEC) final say on matters of financial reporting by publicly owned
  1. True
  2. False

• Currently, generally accepted accounting principles are developed by the American Institute of Certified Public Accountants (AICPA).
  1. True
  2. False

• The Securities and Exchange Commission (SEC) requires that publicly owned corporations submit financial statements to it at least one time each
  1. True
  2. False

• Public accounting firms provide three major types of services: auditing, tax accounting, and management advisory
  1. True
  2. False

• The financial statements and the auditor’s report must be made available to stockholders of publicly owned
  1. True
  2. False

• Anyone can invest in a closely held
  1. True
  2. False

• Managerial Accounting is any activity associated with the preparation of tax returns and the audit of those
  1. True
  2. False