Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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First record of a complete system of double entry bookkeeping can be traced to
the City of Genoa, Italy, in
a. | 13th century | b. | 14th century | c. | 15th
century | d. | 17th century |
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2.
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Which of the following was characteristic of accounting prior to the 16th
Century?
a. | The primary objective of accounting was to provide
information for the owners of the business. | b. | There was a distinction between business and
the owners | c. | continuity of business operations | d. | use of the annual accounting period of
reporting |
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3.
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Adam Smith’s book, Wealth of Nations,
a. | led to more restrictive trade barriers | b. | led to less
restrictive trade barriers | c. | was published in 1494 | d. | argued to keep the
gold standard. |
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4.
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The Factory System:
a. | replaced the cottage system of production | b. | refers to the use of
machines serving to make entrepreneurs more productive. | c. | was made possible by
the industrial revolution | d. | all of the
above |
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5.
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Which of the following is false concerning the so-called balance sheet
theory of profit?
a. | it refers to using the balance sheet to determine the amount of income for the
period. | b. | is no longer used in accounting to determine net income | c. | used a liquidation
viewpoint | d. | can be easily reconciled with the concept of the going
concern. |
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6.
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The need to distinguish between capital and income was accentuated by
a. | Railroads needing large amounts of capital to be invested in long-lived
assets. | b. | the growth of the corporate form of business organization | c. | both (a) and
(b) | d. | neither (a) nor (b) |
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7.
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Cost accounting techniques was late in developing because
a. | manufacturing processes were too complex | b. | management needed
detailed records of costs | c. | of secrecy of methods | d. | overhead costs far
exceeded other production costs. |
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8.
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Which of the following statements is false?
The increased use
of the corporate form of business organization
a. | caused a corresponding growth in the separation of owners and
managers. | b. | reduced the need for information concerning the stewardship of
management. | c. | brought about a renewed emphasis on the concepts of continuity and permanency of
capital. | d. | created the need for a measure of operating efficiency of the firm for periodic
intervals. |
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9.
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The scientific management movement influenced accounting primarily
by:
a. | focusing on the development of standard cost accounting. | b. | improving financial
reporting to stockholders | c. | providing the impetus for increased
governmental regulation of business. | d. | creating an improved rule-making process in
accounting |
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10.
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Which of the following statements is false concerning the
influence of the corporation on accounting development?
a. | The corporation impacted the passing of management from individual owners to hired
professionals. | b. | The corporation led to a continued adherence on the completed venture accounting to
provide information on a timely basis. | c. | The corporation led to a renewed emphasis on
the concepts of continuity and permanency of capital. | d. | The corporation led to the development of the
protection-of-the-equities function in accounting. |
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