31

Self-Test Questions

i9j Explain the career opportunities in accounting.

Accounfing oft'ers man.v* different jobs in fields such as public

and private accounting, govern.meot, and forensic accounting.

Auditing

dix 1A

ective

Summa

The examination of flnancial statemenlr by a cer-

tilied public accountant in order io expres.s an opinion a.s to

tlre fairness of preseotation. (P. 29).
Forensic accounting Arr area of accounting that uses accounting auditing and investigative skills to conduct investigations into theft and fraucl. (p.30).
filtanagement comulting An area of public accounting
ranging from development of accounting and computer
ytem,q to support services for marketiog projecls and
merger and acquisition activitie (p.2{l).

Accoun.ting is a popular major because there are matr-v

different types of jobs, with unlimited potential ftrr career
advancement.

Private (or rnanagerial) accounting An

rea

of

ac-

couniing within a company that involves such activities as

cost accounting, budgeting, design and support of accounting information systemq and tax planning and preparation.
(p'2e).

actounting An area of accountiag in which the accountant offers exped *ervice to the general puttlic. lp. 29).
Taxation An area of public accoutting involving tax advice,
tax planning, preparing tax returnl and representing clients
befnre governmental agencies. (p. 29).
Public

*Note Ail asterisked Questions. Exercises, and Problems relie to Eatrial in ihe appendix to fhe chapter.

uestions

Self-

5. 'Ihe three

Answers tre on page 46.

(5o

1)

types ofbusiness entities are:

proprietorships. small businesseg and partnerships,
and
c. proprietorships, part
d. nancial, manufacturing, arld service companies.

1" \4'trich of the fcllowingis not a step in the accounting

process?

c" Recording.

d.
(SO

about users of acounting informatio n ts iw:o r re c {l

a. Management is an internal user.
b. thxing authorities are extemal users.
-.f*Present creditors are exterltal users.

(
(5O

Communicatirn.

2) 2. Whichof the followingstatemefl

4)

d.)Resulatorv authorities are internal users.

cost principle state that:

3" 'Ihe

*-

initially recoded at cost and adjusted

when the fair value changes"
b. activities of an entity are to be kept separate and dis^ tinct lrom its owner.
(.) assets should he recorded at their cost.
d. only ftansaction data capable of being exnessed in
terms of money be included in the accounting records
(SO

assets should be

5) 4. Which

of the Iollowing stateme[ts about trasic asump-

tions is correct?

.
Basic assumptions are the same as accornti{lg principles.

6. Net income rvill result during a time

s- assets exceed liabilities.
b. assets exceedrevenues

r-

exoefuses excced

mea$ure employee morale,

are not econonic entities

rcvcnues

7. Ilerforming services on accouot will have the frrllo*"ing ef- (so

7)

fects cn the componeats of the basic accounting equatioo:

increase assets and dccrease owner's cquity.
hl)increase assets and inc.rease owncr's eouitv.
c. increase assets nd increase liabilities
d. increase liabilities anl iocrease cwner's equity.

,ft

8. As of December

31,2012. Stoneland C.ompany has assets (So 7)

of $3,50t) and <wner's equitl.' of $2,000. llhat are the lia-

Ailities for Stoneland Company as cf December

Gt)SfS- b. fil.rr(,0. c- $2,500. s2,000.

9. Which of the following events is

31,2{112'!

zo recorded r

accounting records?
is purchased on account.
rAn emnlovee is terminated.
c A cash investrueot is made int.o the buslnesri
d. lte owner withdraws cash for personal use.

. Equipmcnt

d. Partneflihitx

(50 6)

period wben:

the

(so 7)