Page 431 - Introduction to Business

CHAPTER 11 Accounting for Decision Making 405

Test Prepper

You’ve read the chapter, studied the key terms, and the exam is any day now. Think you are ready to ace it?
Take this sample test to gauge your comprehension of chapter material. You can check your answers at the
back of the book.

True/False Questions that are involved in international trade. The
Please indicate if the following statements are true or provisions do not apply to public companies
false: that are involved in strictly domestic trade.
1. One objective of a typical accounting infor- Multiple-Choice Questions
mation system is to provide all the financial
information needed internally by manage- Choose the best answer.
ment for business decision making. 1. The accounting information system, like
2. One objective of a typical accounting all systems, has all of the following except
information system is to provide financial specific
information to various external users con- a. objectives.
cerned with the financial activities of the b. inputs.
organization. c. processes.
3. When CPAs provide audit services, they d. outputs.
render an opinion as to whether the finan- e. technology.
cial statements prepared by a firm’s finan- 2. External groups that use accounting infor-
cial accountants are prepared according to mation do not include
generally accepted accounting principles. a. credit-rating agencies.
4. The management information system pro- b. vendors.
vides only financial information to man- c. management.
agement; the management information d. customers.
system does not deal with nonfinancial e. lending institutions.
information. 3. Reports or documents generated for man-
5. Objectives of international standards agement accounting purposes include all of
include increasing the diversity of account- the following except
ing standards and disclosures to meet the a. sales invoices.
needs of U.S. investors. b. purchase orders.
6. Effective and efficient functioning of the c. inventory reports.
global marketplace requires uniformity in d. tax returns.
accounting and auditing standards. e. capital budgets.
7. Many companies have an ethics code to 4. The issues International
guide their employees in how they conduct Accounting Standards.
business. a. United Nations Committee on Finance
8. Adherence to the standards set by the Inter- and Taxation
national Auditing and Assurance Standards b. International Accounting Standards
Board is mandatory for all members of the Board
International Federation of Accountants. c. American Institute of CPAs
9. In contrast to a computerized accounting d. Institute of Management Accountants
information system, a manual accounting e. International Federation of Accountants
system has several inherent advantages, 5. Unlike the East India Company in the
such as reducing human error caused by 1600s, business firms today are unlikely to
fatigue or carelessness. need armed ships to fight off pirates, but
10. The internal control provisions of the international trade still has its problems,
Foreign Corrupt Practices Act are not limited which include all of the following except
to the detection or prevention of foreign a. tariffs.
bribery, and they affect all public companies b. language barriers.

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.