Types of Accounting

Concept:  

 

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Types of Accounting Additional Practice Problems

The major objective of financial reporting is to provide:

a. essential information to internal users of financial reports.

b. useful economic information about the business to help external parties make sound financial decisions.

c. information to internal users about the cash position of the business.

d. information to the IRS and the Securities Exchange Commission (SEC).

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Which organization has primary responsibility for developing United States generally accepted accounting principles (GAAP)?

a. American Institute of Certified Public Accountants (AICPA)

b. Financial Accounting Standards Board (FASB)

c. Securities and Exchange Commission (SEC)

d. Internal Revenue Service (IRS)

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Identify which of the following are considered external users of financial accounting information (mark all that apply).

a. Employees

b. Managers

c. Owners

d. Banks

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The accounting standards and concepts used in the preparation of financial statements are called:

a. Certified principles of accounting (CPA).

b. Generally accepted accounting principles (GAAP)

c. Financial accounting standards and boundaries (FASB).

d. Standards enforcing consistency (SEC).

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GAAP stands for:

a. generally accepted auditing practices

b. generally accrued accounting principles

c. generally accrued auditing procedures

d. generally accepted accounting principles

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According to the FASB, the primary objective of financial reporting is to provide information:

a. to the Securities and Exchange Commission

b. regarding the assets and liabilities of a business

c. useful for making investing and lending decisions

d. regarding the revenues and expenses of a business

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Accounting guidelines are formulated by:

a. the Securities and Exchange Commission

b. the Financial Accounting Standards Board

c. the American Institute of Certified Public Accountants

d. the American Accounting Association

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