29 Jun Question 1. The process of identifying, measu
QuestionQuestion
1. The process of identifying, measu
1. The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information is called:
A. Accounting
B. Bookkeeping
C. Making journal entries
D. Preparing financial statements
2. Which of the following phrases most closely relates to bookkeeping?
A. Identifying and measuring economic information
B. Communicating economic information
C. Permitting informed judgments by users
D. Permitting informed decisions by users
3. Which of the following most clearly differentiates accounting and bookkeeping?
A. Bookkeeping always involves information technology; accounting does not.
B. Accounting always involves information technology; bookkeeping does not.
C. Bookkeeping is the part of accounting most focused on rules and procedures.
D. A college degree is required for bookkeeping, but not for accounting.
4. Which of the following statements about accounting and bookkeeping is most true?
A. The FASB Conceptual Framework is relevant in accounting, but not in bookkeeping.
B. The FASB Conceptual Framework is relevant in bookkeeping, but not in accounting.
C. As an element of the AIS, internal controls are irrelevant to bookkeeping.
D. As an element of the AIS, outputs are relevant to accounting.
5. Communicating information to external decision makers is accomplished through ___ as part of the process of ___.
A. Financial statements, bookkeeping
B. Financial statements, accounting
C. Journal entries, bookkeeping
D. Journal entries, accounting
6. Plant assets, such as equipment, are reported on financial statements at their book value, thus exemplifying:
A. The measuring process in accounting only.
B. The measuring process in bookkeeping only.
C. The measuring process in both accounting and bookkeeping.
D. Informed judgments as part of the definition of bookkeeping.
7. An accountant received a stack of sales invoices. Which of the following statements is most true?
A. The stack of sales invoices can help the accountant identify economic information, which is part of both accounting and bookkeeping.
B. The accountant is a “user of information” as the phrase is used in the definition of bookkeeping only.
C. The accountant is a “user of information” as the phrase is used in the definition of accounting only.
D. The stack of sales invoices can help the accountant identify economic information, which is part of bookkeeping, but not accounting.
8. Which of the following best pairs an element of bookkeeping with an example of the element?
A. Identifying economic information, reading a balance sheet
B. Identifying economic information, preparing a balance sheet
C. Measuring economic information, reading a balance sheet
D. Measuring economic information, preparing a balance sheet
9. The concept of bookkeeping includes: (i) distinguishing relevant from irrelevant information, (ii) calculating amounts to record in the AIS, (iii) reporting financial results.
A. I and II only.
B. I and III only.
C. II and III only.
D. I, II and III.
10. The definition of accounting has three principal elements. Which of the following is not one of them?
A. Distinguishing relevant from irrelevant information
B. Calculating amounts to record in the AIS
C. Reporting financial results
D. Using the information to make informed judgments
11. Which of the following steps in the accounting cycle occurs first?
A. Analyze transactions.
B. Close the temporary accounts to retained earnings.
C. Prepare an unadjusted trial balance.
D. Record the transactions in a journal.
12. Which step in the accounting cycle immediately precedes closing the temporary accounts?
A. Analyze transactions.
B. Prepare an adjusted trial balance.
C. Prepare financial statements.
D. Record adjusting entries.
13. In what way is the fifth step in the accounting cycle different from the seventh step in the accounting cycle?
A. The fifth step comes before preparing financial statements; the seventh step comes afterward.
B. The fifth step focuses only on permanent accounts; the seventh step focuses only on temporary accounts.
C. The fifth step focuses only on temporary accounts; the seventh step focuses only on permanent accounts.
D. The seventh step includes the results of internal transactions; the fifth step does not.
14. Which of the following is an example of a deferred revenue?
A. A university receives cash from students prior to the start of classes.
B. A convenience store sells newspapers to its customers.
C. Both A and B
D. Neither A nor B
15. Please refer to the following unadjusted trial balance in answering Questions 15 and 16.
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1) VLN had unpaid wages totaling $800 at the end of the accounting period. When VLN’s accountant makes an adjusting entry for the unpaid wages, the new trial balance totals will be:
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