Fap Chapter 01
Your Results: | The correct answer for each question is indicated by a . |
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| 1 INCORRECT | |
Which one of the following users of accounting information is considered to be an external user of accounting information rather than an internal user of accounting information? | | | A) | Internal auditors. | | | B) | Company managers. | | | C) | Company customers. | | | D) | Officers and directors. | | | E) | Budget officers. | | | | | | Feedback: Internal auditors are considered to be internal users. C2 | | 2 INCORRECT | |
A CPA owns a large home and she has divided the second floor into two separate units: one used as her personal residence and the other rented out to local college students as an apartment. On the first floor, she has her own CPA firm where she meets with and provides accounting services to clients. If she wishes to keep separate records for each of these three activities, the accounting principle to which she is adhering is? | | | A) | Going-concern principle. | | | B) | Monetary unit principle. | | | C) | Cost principle. | | | D) | Business entity principle. | | | E) | Conservatism principle. | | | | | | Feedback: The going concern principle means that accounting information reflects an assumption that the business will continue operating instead of being closed or sold. C4 | | 3 INCORRECT | |
The three basic business entities discussed in this chapter include sole proprietorship, partnership, and corporation. Which of these entities is considered a legal entity and is also subject to federal income taxation at the entity level? | | | A) | Sole proprietorship. | | | B) | Partnership. | | | C) | Corporation. | | | D) | All three entities satisfy both requirements. | | | E) | None of these entities satisfy both requirements. | | | | | | Feedback: A sole proprietorship is not
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Top of Form
| 1 INCORRECT | |
Which one of the following users of accounting information is considered to be an external user of accounting information rather than an internal user of accounting information? | | | A) | Internal auditors. | | | B) | Company managers. | | | C) | Company customers. | | | D) | Officers and directors. | | | E) | Budget officers. | | | | | | Feedback: Internal auditors are considered to be internal users. C2 | | 2 INCORRECT | |
A CPA owns a large home and she has divided the second floor into two separate units: one used as her personal residence and the other rented out to local college students as an apartment. On the first floor, she has her own CPA firm where she meets with and provides accounting services to clients. If she wishes to keep separate records for each of these three activities, the accounting principle to which she is adhering is? | | | A) | Going-concern principle. | | | B) | Monetary unit principle. | | | C) | Cost principle. | | | D) | Business entity principle. | | | E) | Conservatism principle. | | | | | | Feedback: The going concern principle means that accounting information reflects an assumption that the business will continue operating instead of being closed or sold. C4 | | 3 INCORRECT | |
The three basic business entities discussed in this chapter include sole proprietorship, partnership, and corporation. Which of these entities is considered a legal entity and is also subject to federal income taxation at the entity level? | | | A) | Sole proprietorship. | | | B) | Partnership. | | | C) | Corporation. | | | D) | All three entities satisfy both requirements. | | | E) | None of these entities satisfy both requirements. | | | | | | Feedback: A sole proprietorship is not