1.Both Generally Accepted Accounting Principles and the Internal Revenue Code________.

A. are established by acts of Congress

B. are fairly static (unchanging)

C. are being constantly reviewed and revised

2. Which of the following terms BEST describes an organization structure with separate product lines that operate as relatively autonomous business units under a larger corporate umbrella?

A. International

B. Functional

C. Divisional

3. As you review the financial statements of a publicly traded company, you notice wild variations in the amount of revenue reported each year. Which one of the following accounting principles would cause you to expect to find more information in the footnotes?

A. Full disclosure

B. Verifiability

C. Conservatism

4. Which one of the following forms of organization is most common in the United States?

A.Sole proprietorship

B. Partnership

C. Corporation

5. Which one of the following would be MOST interested in financial accounting information?

A. Creditor or lender

B. Production supervisor

C. Sales force

6. Under the rules of ________ accounting, expenses are recognized as they are incurred.

A. accrual basis

B. cash basis

C. internal

7.Which one of the following would be external users of financial information?

A. Employees

B. Lenders

C.Management

8. Which section of the annual report would you turn to if you were interested in the company's results of operations for the past year?

A. The Form 10-K summary sheet

B. Management's Discussion and Analysis

C. The audited financial statements

9. Which one of the following would likely result in a going concern disclosure?

A. Liabilities exceed assets.

B. A net loss on the most current income statement.

C.Sales are rising faster than the company can fulfill them.

10. Ethics is the ________ that provides criteria for evaluating ________.

A. legal term; criminal acts

B. code or moral system; right and wrong

C. logical system; good and bad