Chapter 1 Role of Accounting in Society

Question 1

Accounting

Answer 1

Process of organizing, analyzing, and communicating financial information that is used for decision-making

Question 2

Auditing

Answer 2

Process of ensuring activities are carried out as intended or designed

Question 3

Consulting

Answer 3

Process of giving advice or guidance on financial and nonfinancial impact of a course of action

Question 4

Cost accounting

Answer 4

Recording and tracking of costs in the manufacturing process

Question 5

Creditor

Answer 5

Business that grants extended, but short-term, payment terms to other businesses

Question 6

Financial accounting

Answer 6

Measures the financial performance of an organization using standard conventions to prepare financial reports

Question 7

Financial Accounting Standard Board((FASB))

Answer 7

Independent, non profit organization that sets financial accounting and reporting standards for both public and private sector businesses in the U.S that use Generally Accepted Accounting Principles (GAAP)

Question 8

For-profit business

Answer 8

Has the primary purpose of earning a profit by selling goods and services

Question 9

Generally Accepted Accounting Principles((GAAP))

Answer 9

Common set of rules, standards, and procedures that publicly traded companies must follow when composing their financial statements

Question 10

Governmental accounting

Answer 10

Process of tracking the inflows and outflows of taxpayer funds using prescribed standards

Question 11

Governmental Accounting Standards Board((GASB))

Answer 11

Source of principles ((GAAP))used by state and local governments in the United States; is a private nongovernmental organization

Question 12

Governmental entity

Answer 12

Provides services to the general public ((taxpayers))

Question 13

Lender

Answer 13

Bank or other institution that has a primary purpose of lending money

Question 14

Managerial accounting

Answer 14

Process that allows decision makers to set and evaluate business goals by determining what information they need to make a particular decision and how to analyze and communicate this information.

Question 15

Manufacturing business

Answer 15

For-profit business that is designed to make a specific product or products

Question 16

Nonprofit((not-for-profit)) organization

Answer 16

Tax-exempt organization that serves its community in a variety of areas

Question 17

Privately held company

Answer 17

Company whose stock is available only to employees or select individuals or groups

Question 18

Publicly traded company

Answer 18

Company whose stick is traded ((bought and sold)) on an organized stock exchange

Question 19

Retail business

Answer 19

For-profit business that purchases products ((called inventory)) and resells the products without altering them

Question 20

Securities and Exchange Commission((SEC))

Answer 20

Federal regulatory agency that regulates corporations with shares listed and traded on security exchanges through required periodic filings

Question 21

Service business

Answer 21

Business that does not sell tangible products to customers but rather sell intangible benefits((services)) to customers; can either be a for-profit or not-for-profit organization

Question 22

Stakeholder

Answer 22

Someone affected by decisions made by a company; -investors

• creditors
• employees
• managers
• regulators
• customers
• suppliers
• layperson

Question 23

Stockholder

Answer 23

Owner of stock, or shares in a business

Question 24

Transaction

Answer 24

Business activity or event that has an effect on financial information presented on financial statements

Question 25

Accounting is sometimes called what?

Answer 25

The “language of business”

Question 26

Financial accounting information

Answer 26

Summarizes what has already occurred

Question 27

External users of financial accounting information does not include ?

Answer 27

Employees , managers, and other business personnel

Question 28

Which group would have access to managerial accounting information?

Answer 28

Managers

Question 29

What are a couple of examples of managerial accounting activities?

Answer 29

* Deciding whether or not to use automation | * Making equipment repair or replacement decisions

Question 30

What’s not true about organizations?

Answer 30

Organizations share a common purpose/mission

Question 31

What is the primary purpose of a Not-For-Profit business?

Answer 31

To serve a particular need or interest in the community

Question 32

What are some examples of a retailer?

Answer 32

* Electronics store * Grocery store * Car dealership * Jewelry store

Question 33

A governmental agency can be best described as?

Answer 33

A governmental agency’s primary purpose is to use taxpayer funds to provide services.

Question 34

Is a movie theater a type of not-for-profit entity?

Answer 34

No, it’s a for profit.

Question 35

True or false: | A business in another industry is considered a stakeholder of an organization.

Answer 35

False, stakeholders are within the business.

Question 36

Stockholders

Answer 36

Investors who purchase an ownership in the business

Question 37

What kind of company sells stock on an organized stock exchange such as New York Stock Exchange?

Answer 37

Publicly traded companies

Question 38

There are a few sustainable methods businesses can use to raise capital except for?

Answer 38

Tax refunds

Question 39

Accounting information is generally available to?

Answer 39

* Governmental agencies * Investors * Creditors and lenders

Question 40

What are the attributes/skills accountants need?

Answer 40

* Written communication * Verbal communication * Ability to work independently * Analytical thinking

Question 41

What is the educational requirement for entry-level positions in the accounting profession?

Answer 41

Bachelor’s degree

Question 42

Typical accounting tasks include?

Answer 42

* Auditing •Recording and tracking costs * Tax compliance and planning * Consulting

Question 43

What type of organization primarily offers tax compliance, auditing, and consulting services?

Answer 43

Public Accounting Firms

Question 44

Most states require 150 semester hours of college credit for which professional certification?

Answer 44

Certified Public Accountant ((CPA))