Multiple Choice Questions-100 points (2.5 points each) ) People who manage a business or make business decisions a) always rely on accountants to make decisions impacting the financial condition of the firm. b) need to understand accounting statements in order to realize and measure the financial impact of their decisions on the business. c) do not need to understand accounting statements but only the operational aspects of their jobs. d) rely on their bankers for investment decisions. 2) Which of the following industries do not require accounting information systems? a) Government sector. b) Private companies. c) There is no industry or sector that does not benefit from accounting information d) Not-for-profit sector 3) Awareness and pursuit of social responsibility toward environment and society in general a) is in a state of decline. b) results in poor investment opportunities thus reducing profits. c) is frowned upon by Wall Street. d) is good for a company because such practices may increase its stock value. What is the potential economic impact if investors lose faith in financial information reported? a) 4) Investors will not be able to set a fair price for selling their shares. b) Stock prices will rise, but investors will be more cautious about which stocks they purchase. c) Stock prices will fall and companies will not be able to raise capital from investors d) Prices for goods and services will fall, signaling the start of an economic recession. 5) Revenues would not result from a) issuance of common stock. b) performance of services. c) rental of property d) sale of merchandise The basic accounting equation cannot be restated as a) Assets-Stockholders' Equity = Liabilities. b) Assets-Liabilities = Stockholders' Equity. c) Assets + Liabilities Stockholders' Equity d) Stockholders' Equity + Liabilities - Assets. 6) Stockholders' equity is decreased by all of the following except a) net losses. b) expenses c) dividends. d) sales of stock. 7) s) Which of the following will not cause a change in the stockholders' equity of a business? a) The declaration and payment of dividends. b) An increase in prepaid expenses c) An increase in retained earnings. d) The sale of common stock. 9) When comparing a baseball and a football professional team, their a) b) c) d) revenue and expense accounts will be similar revenue accounts will be similar but expense accounts will be dissimilar. revenue accounts will be dissimilar but expense accounts will be similar. revenue and expense accounts will be dissimilar