1.) Although accounting has several specific uses, the overall purpose of accounting can be summarized as:
To provide financial information that is useful to decision makers.
To meet the legal requirements of the Financial Accounting Standards Board (FASB).
To allow the government to track business activity levels.
To compute the profit or loss and declared dividend of a business firm.
2.) Accounting transactions are very important to a firm's operations. Which of the following activities would affect the
firm's account balances?
Buying and selling goods and services
Interviewing prospective employees
Understanding economic reports
Forecasting consumer demand
3.) Before starting his landscape business, Andrew took a marketing class at the local Community College. He decided
that his time would be better utilized in this class because if he could learn to sell his services well, the revenues and
profits would follow. Your assessment of his plan might include which of the following:
Andrew understands that Marketing is the life-blood of the company, and he is right on track with his
approach.
Andrew has elected to operate like a virtual company and leave various parts of the business including
accounting, environmental trends scanning, and management to outsourcers.
Andrew knows that increasing revenues will always keep the business profitable and in a positive cash
position.
Andrew needs to realize that the ability to understand and interpret financial statements provided by his
accountant might enhance his profits.
4.) The area of accounting that provides managers inside the organization with information they need to make
decisions is called:
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