Proprietorship
Partnership
Corporation
A.
B.
C.
D.
E.
F.
G.
H.
Proprietorship
Partnership
Corporation
A.
Yes
Yes
Yes
B.
Yes
No
Yes
C.
Yes
Yes
No
D.
No
No
Yes
E.
No
No
Yes
F.
Yes
Yes
Yes
G.
No
Yes
No
H.
No
No
Yes
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
190. The following is a list of users of accounting information. Match the appropriate user groups to the following information needs. NOTE: Some needs may apply to more than one user group.(a) Employees(b) Lenders(c) External auditors(d) Managers(e) Suppliers(f) Regulators(g) Shareholders ______(1) The level of sales necessary to break even._______(2) Verification that external reports are accurate._______(3) Computation of taxes._______(4) The ability of a company to repay its loans._______(5) The amount of current income._______(6) Fairness of wages._______(7) Promptness of customer payment of bills._______(8) Profit outlook.
(1) d (2) b, c, e, f, g (3) d or f (4) b (5) b, d, f, g (6) a (7) b, d (8) g
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-03 Identify users and uses of, and opportunities in, accounting.
Topic: 01-07 External Information Users
191. Describe the main user groups, their members, and their uses of accounting information.
There are two types of users of accounting information. Internal users are individuals directly involved in managing and operating an organization. Internal user groups include research and development, purchasing, human resources, production, distribution, marketing and servicing. They require information to improve the efficiency and effectiveness of an organization in delivering products and services. External users include shareholders, lenders, directors, customers, suppliers, regulators, lawyers, brokers and the press. The information required depends on the kind of decision being made.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-03 Identify users and uses of, and opportunities in, accounting.
Topic: 01-07 External Information Users
Topic: 01-08 Internal Information Users
192. Explain why ethics and social responsibility are an integral part of accounting.
The purpose of accounting is to provide useful information for decision makers. For information to be useful, it must be complete, neutral and free from bias. This requires ethical and socially responsible behaviour by accountants and managers in all phases of gathering, analyzing, and reporting financial information.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Hard
Learning Objective: 01-04 Identify and explain why ethics and social responsibility are crucial to accounting.
Topic: 01-14 Ethics and Social Responsibility
193. Identify several opportunities in accounting and its related fields.
The traditional areas of accounting include financial accounting, managerial accounting, auditing, and taxation. Other opportunities include management advising, investigations, and planning. Work in related fields includes consulting, underwriting, appraisals and trading.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Identify users and uses of, and opportunities in, accounting.
Topic: 01-10 Financial Accounting
194. Explain the difference between the functions of an internal auditor and an external auditor.
An internal auditor is employed within the organization for the purpose of evaluating the efficiency and effectiveness of organizational procedures. n external auditor performs an audit of the company's records at the request of the Board of Directors to protect shareholder interests.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Identify users and uses of, and opportunities in, accounting.