The primary objective of financial accounting is to provide general-purpose financial statements to help external users analyze and interpret an organization's activities. a. True b. False | Homework.Study.com (2024)

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• True or False: The primary objective of financial accounting is to provide general-purpose financial statements to help external users analyze and interpret an organization's activities.
• Financial accounting reports are general-purpose and intended for external users. True False
• The objective of financial accounting is to provide relevant and timely information to decision makers external to the organization. True False
• Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders. a. True b. False
• True or false? Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to management.
• Financial accounting is the area of accounting aimed at sewing internal users by providing them with specific income statement. True False
• Answer true or false: A classified balance sheet provides useful information for interpretation and analysis by users of financial statements.
• Users of financial statements are assumed to need no knowledge of business and financial accounting matters to understand information contained in financial statements. a. True b. False
• Managerial accounting is an activity that provides financial and non-financial information to an organization's managers and other internal decision-makers. (a) True (b) False.
• From a financial accounting perspective, the main purpose of a system of internal control is to improve the accuracy and reliability of accounting information and to safeguard assets. (a) True (b) False.
• Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organization's operations. a. True b. False
• Answer true or false: For most large businesses, the cash basis of accounting will provide accurate financial statements for user needs.
• The information gained from an analysis of financial statements has its greatest value in assisting the user in making predictions. a) True b) False
• Financial accounting stresses accounting concepts and procedures that are relevant to preparing reports for internal users of accounting information. True False
• The analysis of retained earnings provides the starting point for determining cash flows from operating activities under the indirect method only. Is the statement true or false?
• The objective of financial reporting is the foundation of the conceptual framework. a. True b. False
• True or False: Financial statements are reports that summarize the financial condition and operations of a business.
• True or false? Accounting information users need reports about the economic activities and condition of businesses.
• Financial accounting refers to accounting information that is used by management for decision-making purposes. a. True b. False
• Determine whether the following statement is true or false: Users of managerial accounting information desire more detailed accounting reports than do users of financial accounting information.
• Both financial and managerial accounting influence user's decisions and actions. Is the statement true or false?
• Accounting is an information and measurement system that identifies records and communicates financial information to users. a. True b. False
• Determine whether the following statement is true or false: Managerial accounting information is provided to external users to aid in decision making.
• Financial statements are the principal means through which financial information is communicated to those outside an enterprise. a. True b. False
• Financial statements are designed to meet the needs of specific financial statement user groups. True or false?
• An objective of financial statement analysis is to provide information about the company's past performance and current financial position. a. True. b. False.
• An objective of financial statement analysis is to provide information about the company's past performance and current financial position. True False
• An objective of financial statement analysis is to provide information about the company's past performance and current financial position. i. True. ii. False.
• Understanding generally accepted accounting principles is not necessary when using and interpreting financial statements. a. True b. False
• Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information. True False
• True or false? Customers are external users of accounting information.
• Identify whether the statement is true or false. If the statement is false, explain why. General purpose financial reports are designed to show the value of a reporting entity.
• True or false? The area of accounting that focuses on reporting information to internal users is called managerial accounting.
• The primary objective of internal control procedures is to grow the assets of the business. True False
• Financial statements are the principal means through which a company communicates its financial information to those outside it. True False
• The goal of managerial accounting is to provide information for planning, controlling, and reporting information to shareholders. True False
• A government's internal managers rely on general-purpose financial statements for a considerable amount of information about their government. a. TRUE b. FALSE
• The accounting profession assumes that financial statement users have a reasonable knowledge of business. True or false?
• True or false? Understanding generally accepted accounting principles is not necessary to effectively use and interpret financial statements.
• The contribution format is widely used for preparing external financial statements. (a) True (b) False.
• Managerial accounting is concerned with external reporting, that is, reporting the results of economic activities to parties outside the firm. a. True b. False
• Financial Accounting Concepts set forth fundamental objectives and concepts that are used in developing future standards of financial accounting and reporting. a. True b. False
• The accounting profession assumes that financial statement users have expert knowledge of the business. True False
• True or false? The more financial statements represent the subjective opinion of management, the more useful the information is to the user.
• Answer true or false: Financial accounting should be used for assessing the financial health of large organizations only.
• The focus of financial accounting is on an organization's projects, processes, and subdivisions, and the focus of managerial accounting is on the whole organization. a. True. b. False.
• An objective of financial reporting is to report the plans made by a company to improve the productivity of its employees. True False
• The purpose of managerial accounting is to gather, summarize, and report the cost and revenue data relevant to each decision that is made. a. True. b. False.
• True or false? The application of the concept of consistency is essential if users are to rely on financial statements.
• In general, the term expense is used for managerial purposes, while the term cost refers to external financial reports. a. True. b. False.
• Users of financial accounting statements have both coinciding and conflicting needs for information of various types. a. True b. False
• True or False: Managerial accounting, as compared to financial accounting, is focused internally on the organization's accounting information.
• True or false? For accounting purposes, it is important to keep an owner's personal financial records separate from the business's financial records.
• In the fund financial statements, a government may elect to report any governmental or enterprise fund as major if the government considers financial information on that fund particularly important to statement users. a. True. b. False.
• Of the three major categories of activities on the statement of cash flows, the operating activities are the most important. True or False? Explain.
• The objective of depreciation accounting is to spread the depreciable amount of an asset over its estimated useful life. a. True. b. False.
• Managerial accounting provides financial and nonfinancial information to an organization's managers and other internal decision-makers. A) True B) False
• True or false? Regulatory agencies are external users of accounting information.
• The decision-model approach to accounting research seeks to determine what information users of accounting information want. a. True b. False
• True or false? The main objective of information technology auditing is to evaluate the computer's role in achieving audit and control objectives.
• Clearly establishing responsibilities and assigning all accounting activities to one person is an important principle of internal control. (True False)
• Financial accounting is broader in scope than management accounting. a. True b. False
• The primary accounting standard-setting body in the United States is the Financial Accounting Standards Board (FASB). True False
• The primary purpose of a statement of cash flows is to provide relevant information about the cash receipts and cash disbursem*nts of an enterprise during an accounting period. True or False?
• True or false? Financial accounting is narrower in scope than managerial accounting.
• The auditors determine which disclosures must be presented in the financial state. a. True b. False
• True or false? The financial statements of a proprietorship should include the owner's personal assets and liabilities.
• For financial accounting purposes, product costs include direct materials, direct labor, and manufacturing overhead. a. True. b. False.
• Management accounting is the branch of accounting designed to provide information to the firm's internal economic decision-makers. True or False.
• Managerial accounting systems consider economic and non-financial data as well as financial statement data. True False
• Determine whether the following statement is true or false: If the cash flows from operating activities begin with "cash collected from customers," the indirect method is being applied.
• True or false? Managerial accounting is concerned with external reporting, which is reporting the results of economic activities to parties outside the firm.
• True or false? Managerial accounting is concerned with external reporting, that is, reporting the results of economic activities to parties outside the firm.
• The Coo, typically, has the primary responsibility for financial reporting and the safeguarding of assets of a company. a. True b. False
• Interpreting financial analysis should be considered in light of conditions peculiar to the industry and the general economic conditions. a. True b. False
• Determine whether the following statement is true or false: Both managerial and financial accounting use economic and physical data in addition to financial data.
• The discounted cash flow approach can be used to determine an objective measurement for most assets and liabilities a. True b. False
• Users of financial reports for a company use the information provided by these reports to make their capital allocation decisions. True False
• For management accounting, internal measurement and reporting are based on cost-benefit analysis. True False
• True or false? Government-wide financial statements include three basic financial statements: a statement of net assets, a statement of activities, and an income statement.
• (True or False) _____ 1. Government-wide financials are divided into Governmental and Business Type activities. (True or False) _____ 2. Internal Service Funds are reported under business-type activities in the Government-wide Financials.
• When the outside accountant presents only financial information as provided by management, he or she is said to have reviewed the financial statements. True False
• During the accounting cycle, we analyze transactions to prepare statements. (a) True (b) False.
• True or false? Investors are external users of accounting information.
• True or False: The cash basis of accounting is more useful than the accrual basis as the balance in the bank account is always reflected in the financial statements.
• State whether the following statements are true or false: 1) Reports prepared in financial accounting are general purpose reports, whereas reports prepared in managerial accounting are usually specia
• A common-size balance sheet helps financial managers determine which customers are paying on a timely basis. (a) True (b) False.
• True or false? The ultimate responsibility for the financial statements lies with the auditors.
• Answer true or false: Financial statements provide the form and structure for the conveyance of financial information that will create a likeness of the reporting organization.
• Answer true or false: Employees of a company would not have a reason to use the information provided by financial accounting.
• The reason some major intangible assets are not in the financial statements is because they cannot be measured. True False
• Capital budgeting is a major responsibility for financial management. a. True b. False
• True or False: For external-reporting purposes, generally accepted accounting principles require that net income be based on variable costing.
• The work sheet is a tool used to assist in the preparation of financial statements. a. True b. False
• Cost accounting has as a primary responsibility for the filing of financial reports to the SEC. True or False.
• An accounting Principle is a general law or rule followed in the preparation of financial statements. a. True b. False
• Answer true or false: Ratio analysis is a preferred method of analyzing a firm's financial position because a firm cannot manipulate financial information that would impact the value of the ratios.
• Managers' activities and responsibilities can be classified into three broad functions: cost accounting, budgeting, and internal control. True False
• True or false? For internal management purposes, net income is the most important number on the income statement; if the company is making a profit, it is doing fine.
• Analysis of financial statements is enhanced with the use of comparative data. a. True. b. False.