MULTIPLE CHOICE QUESTIONS

44. Accountants refer to an economic event as a

a. purchase.

b. sale.

c. transaction.

d. change in ownership.

Ans: c LO1 BT: K Difficulty: Easy TOT: 1.0 min. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reportin g

45. The process of recording transactions has become more efficient because

a. fewer events can be quantified in financial terms.

b. computers are used in processing business events.

c. more people have been hired to record business transactions.

d. business events are recorded only at the end of the year.

Ans: b LO1 BT: K Difficulty: Easy TOT: 1.0 min. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting

46. Communication of economic events is the part of the accounting process that involves

a. identifying economic events.

b. quantifying transactions into dollars and cents.

c. preparing accounting reports.

d. recording and classifying information.

Ans: c LO1 BT: K Difficulty: Easy TOT: 1.0 min. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting
 47. Which of the following events cannot be quantified into dollars and cents and recorded as an
accounting transaction?

a. The appointment of a new CPA firm to perform an audit.

b. The purchase of a new computer.

c. The sale of store equipment.

d. Payment of income taxes.

Ans: a LO1 BT: C Difficulty: Easy TOT: 1.0 min. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting

48. The use of computers in recording business events

a. has made the recording process more efficient.

b. does not use the same principles as manual accounting systems.

c. has greatly impacted the identification stage of the accounting process.

d. is economical only for large businesses.

Ans: a LO1 BT: K Difficulty: Easy TOT: 1.0 min. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting
 49. The accounting process involves all of the following except

a. identifying economic transactions that are relevant to the business.

b. communicating financial information to users by preparing financial reports.

c. recording nonquantifiable economic events.

d. analyzing and interpreting financial reports.

Ans: c LO1 BT: K Difficulty: Easy TOT: 1.0 min. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting

50. The accounting process is correctly sequenced as

a. identification, communication, recording.

b. recording, communication, identification.

c. identification, recording, communication.

d. communication, recording, identification.

Ans: c LO1 BT: K Difficulty: Easy TOT: 1.0 min. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting

51. Which of the following techniques are not used by accountants to interpret and report financial
information?

a. Graphs.

b. Special memos for each class of external users.

c. Charts.

d. Ratios.