Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Burnley test bank
b) management
c) regulators
d) shareholders
Answer: b
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Identify the main users of financial accounting information and explain how they use this information.
CPA: Financial Reporting
AACSB: Analytic
35. The shareholders typically elect which of the following to represent their interests?
a) senior management
b) independent auditors
c) board of directors
d) chief operating officer
Answer: c
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Identify the main users of financial accounting information and explain how they use this information.
CPA: Financial Reporting
AACSB: Analytic
36. All of the following are external users EXCEPT
a) labour unions.
b) management.
c) regulators.
d) journalists.
Answer: b
Bloomcode: Knowledge
Difficulty: Medium
Learning Objective: Identify the main users of financial accounting information and explain how they use this information.
CPA: Financial Reporting
AACSB: Analytic
37. Those who lend money or otherwise extend credit rather than invest it directly in the company are known as
a) investors.
b) regulators.
c) creditors.
d) unions.
Answer: c
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Identify the main users of financial accounting information and explain how they use this information.
CPA: Financial Reporting
AACSB: Analytic
38. Publicly traded corporations that fail to comply with securities regulations related to statement presentation and timing, may
a) be fraudulent.
b) be delisted.
c) face criminal charges.
d) have a questionable management team.
Answer: b
Bloomcode: Knowledge
Difficulty: Medium
Learning Objective: Identify the main users of financial accounting information and explain how they use this information.
CPA: Financial Reporting
AACSB: Analytic
39. Creditors include which of the following?
a) suppliers
b) financial institutions
c) employees
d) All of the choices are correct.
Answer: d
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Identify the main users of financial accounting information and explain how they use this information.
CPA: Financial Reporting
AACSB: Analytic
40. Privately held corporations
a) always have multiple shareholders.
b) always require a board of directors to represents its interests.
c) raise capital through the sale of shares.
d) are not traded on the stock market.
Answer: d
Bloomcode: Comprehension
Difficulty: Medium
Learning Objective: Identify the main users of financial accounting information and explain how they use this information.
Learning Objective: Describe the major forms of business organization and explain the key distinctions between each form.
CPA: Financial Reporting
AACSB: Analytic
41. The form of business ownership that most effectively limits the risk of ownership is
a) sole proprietorship.
b) general partnership.
c) corporation.
d) all forms of business ownership, since they are equally risky.
Answer: c
Bloomcode: Comprehension
Difficulty: Medium
Learning Objective: Describe the major forms of business organization and explain the key distinctions between each form.
CPA: Financial Reporting
AACSB: Analytic
42. Jennifer is a university student looking to earn some cash for tuition over the summer months (April–August). She has decided to start a lawn care business, what business structure would best suit her needs?
a) private corporation
b) public corporation
c) general partnership
d) sole proprietorship
Answer: d
Bloomcode: Comprehension
Difficulty: Medium
Learning Objective: Describe the major forms of business organization and explain the key distinctions between each form.
CPA: Financial Reporting
AACSB: Analytic
43. A corporation whose shares are held by a small number of individuals is referred to as a
a) proprietorship.
b) publicly traded corporation.
c) small business corporation.
d) privately held corporation.
Answer: d
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Describe the major forms of business organization and explain the key distinctions between each form.