Worksheet

Horngren's Financial & Managerial Accounting, 4e (Nobles)

Chapter 1 Accounting and the Business Environment

Learning Objective 1-1

1) Accounting is the information system that measures business activities, processes the information into reports, and communicates the results to decision makers.

Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

2) Accounting is referred to as the language of business because it is the method of communicating business information to stakeholders.

Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

3) Managerial accounting focuses on information for external decision makers.

Answer: FALSE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

4) Stockholders primarily use managerial accounting information for decision-making purposes.

Answer: FALSE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

5) A creditor is a person who owes money to the business.

Answer: FALSE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

6) Local, state, and federal governments use accounting information to calculate income tax.

Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

7) Financial accounting focuses on information for decision makers outside of the business, such as creditors and taxing authorities.

Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

8) Business owners use accounting information to set goals, evaluate progress toward those goals, and make adjustments when needed.

Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

9) Outside investors would ordinarily use managerial accounting information to decide whether or not to invest in a business.

Answer: FALSE

Diff: 1

LO: 1-1

AACSB: Concept

AICPA Functional: Measurement

10) A creditor is any person who has an ownership interest in a...