Chapter 1

Question 1

The process of identifying, measuring, and communicating economic information about the organization for the purpose of making decisions informed judgments

Answer 1

Accounting

Question 2

Accounting that recognizes revenues and expenses as they occur, even though the cash receipt from the revenue or the cash disbursement related to the expense may occur before or after the event that causes revenue or expense recognition

Answer 2

Accrual accounting

Question 3

A document distributed to shareholders and other interested parties that contains the financial statements, explanatory notes, and management decisions and analysis of financial an operating factors that affected the firm together with the report of the external auditors examination of the financial statements

Answer 3

Annual report

Question 4

The process of examining the financial statements of an entity by an independent third-party with an objective of expressing an opinion about the fairness of the presentation of the entities financial position, results of operations, changes in financial position, and cash flow’s. This practice is also referred to as public accounting

Answer 4

Auditing

Question 5

Procedures that are used to keep track of financial transactions and accumulate the results of an end of these financial activities

Answer 5

Bookkeeping

Question 6

Cash receipts or disbursements of an entity

Answer 6

Cash flow – page 5

Question 7

Companion professional designations earned by passing broad, for part examinations and meeting certain experience requirements. Examination topics include economics, corporate finance, information management, financial accounting and reporting, management reporting, decision analysis, and behavioral issues.

Answer 7

Certified management accountant and\or certified in financial management

Question 8

A professional designation earned by filling certain education and experience requirements, in addition to passing a comprehensive, for part examination. Examination topics include financial accounting theory and practice, income tax accounting, managerial accounting, governmental a non-for profit accounting, editing, business law, and other aspects of the business environment

Answer 8

Certified public accountant

Question 9

The job title of the person who is the chief accounting officer of an organization. They are usually responsible for both of financial and managerial accounting functions. Sometimes referred to as comptroller

Answer 9

Controller

Question 10

A subset of managerial accounting that relates to the determination and accumulation of product, process, or service costs

Answer 10

Cost accounting

Question 11

A group authorized by the US Congress to establish cost accounting standards for government contractors

Answer 11

Cost accounting standards board (CASB)

Question 12

An organization or individual who lens to the entity. Examples include suppliers who ship merchandise to the entity prior to receiving payment for their goods and banks that lend cash to the entity

Answer 12

Creditor

Question 13

An organization, individual, or a group of organizations or individuals for which accounting services are performed

Answer 13

Entity

Question 14

Accounting that focuses on reporting entities financial position at a point in time and\or it’s result of operations and cash flows for a period of time

Answer 14

Financial accounting

Question 15

And organization composed of people from the public accounting profession, businesses, and the public that is responsible for the funding of the appointing members of the financial accounting standards board and the governmental accounting standards board

Answer 15

Financial accounting foundation

Question 16

The body responsible for establishing generally excepted accounting principles

Answer 16

Financial accounting standards board (FASB)

Question 17

Established by the Financial Accounting Foundation to develop guidelines for financial accounting and reporting by state and local government units.

Answer 17

Governmental Accounting Standards Board (GASB)

Question 18

The personal characteristic of an accountant, especially an auditor, that refers to both appearing and in fact being objective and impartial.

Answer 18

Independence

Question 19

The report accompanying audited financial statements that explain briefly the auditor’s responsibility and the extent of work performed. The report includes an opinion about whether the information contained in the financial statement is presented fairly in accordance with generally accepted accounting principals

Answer 19

Independent auditor’s report

Question 20

The personal characteristic of honesty, including being forthright in dealings and communications with others.

Answer 20

Integrity

Question 21

The practice of auditing within a company by employees of the company

Answer 21

Internal Auditing

Question 22

An organization or individual who has the ownership interest in the firm. For corporations, referred to as stockholders or shareholders

Answer 22

Investor

Question 23

Accounting that is concerned with the internal use of economic and financial information to plan and control many activities of an entity and to support the management decision-making process.

Answer 23

Managerial Accounting

Question 24

The personal characteristic of impartiality, including freedom of conflict of interest.

Answer 24

Objectivity

Question 25

The segment of the accounting profession that provides auditing, income tax accounting, and management consulting services to clients

Answer 25

Public Accounting

Question 26

Established in 2002 with authority to set and enforce auditing and ethics standards for public companies and their auditing firms: affiliated with the SEC

Answer 26

Public Company Accounting Oversite Board (PCAOB)

Question 27

A unit of the federal government that is responsible for establishing regulations and assuring full disclosure to investors about companies and their securities that are traded in interstate commerce.

Answer 27

Securities and Exchange Commission

Question 28

Pronouncements of the Financial Accounting Standards Board (FASB) that constitute generally accepted accounting principals.

Answer 28

Statements of financial Accounting Standards