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Examination Question and Answers, Set A (True or False), Chapter 1 - Introduction To Accounting and Business

This document contains a series of true/false questions about introductory accounting concepts. It covers topics like the three main types of for-profit businesses, stakeholders, the purpose of managerial accounting, generally accepted accounting principles, the accounting equation, and more. The questions test understanding of foundational accounting definitions and standards setting organizations.

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John Carlos Doringo
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134 views

Examination Question and Answers, Set A (True or False), Chapter 1 - Introduction To Accounting and Business

This document contains a series of true/false questions about introductory accounting concepts. It covers topics like the three main types of for-profit businesses, stakeholders, the purpose of managerial accounting, generally accepted accounting principles, the accounting equation, and more. The questions test understanding of foundational accounting definitions and standards setting organizations.

Uploaded by

John Carlos Doringo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Chapter 1—Introduction to Accounting and Business [TRUE/FALSE]

Three types of businesses that operate for profit are manufacturing, merchandising and service
businesses.
ANS: T DIF: 1 OBJ: 01

An example of a business stakeholder is a bank that has lent money to the business.
ANS: T DIF: 5 OBJ: 01

Accounting is an not an information system and is often called the "language of business."
ANS: F DIF: 1 OBJ: 02

An individual who wishes to practice public accounting as a CPA must meet the requirements of the
United States Bureau of Accountancy.
ANS: F DIF: 1 OBJ: 04

The Institute of Certified Management Accountants, an affiliate of the American Institute of Certified
Public Accountants (AICPA), sponsors the Certified Management Accountant (CMA) program.
ANS: F DIF: 1 OBJ: 04

Managerial accounting is primarily concerned with the recording and reporting of economic data and
activities for an entity for use by owners, creditors, governmental agencies, and the public.
ANS: F DIF: 1 OBJ: 04

The initials GAAP stand for generally accepted accounting practices.


ANS: F DIF: 1 OBJ: 05

A business transaction is the occurrence of an event or condition that must be recorded.


ANS: T DIF: 1 OBJ: 05

The business entity concept requires that monetary business transactions be recorded at market value.
ANS: F DIF: 1 OBJ: 05

The Financial Accounting Standards Board is the authoritative body that has primary responsibility for
developing accounting principles.
ANS: T DIF: 1 OBJ: 05

The business entity concept is based on the applicability of accounting to individual economic units of
society.
ANS: T DIF: 1 OBJ: 05

If a building is offered for sale at $100,000 and the buyer pays $85,000 cash for it, the buyer would
record the building at $100,000.
ANS: F DIF: 5 OBJ: 05

Land with an appraisal value of $40,000 for property tax purposes is offered for sale at $110,000. If a
buyer pays $105,000 in cash for the land, the buyer would record the land in the records at $40,000.
ANS: F DIF: 5 OBJ: 05
The accounting equation can be expressed as Revenues + Assets = Owner's Equity.
ANS: F DIF: 1 OBJ: 06

The accounting equation can be expressed as Assets = Liabilities + Expenses.


ANS: F DIF: 1 OBJ: 06

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