Free FAU Accounting Competency Questions and Answers

Question 1

What area of accounting is based on the needs of the users?

Accepted Answer

Managerial

Answer

Financial

Answer

Tax

Question 2

What area of accounting follows rules set by the government?

Accepted Answer

Tax

Answer

Financial

Answer

Managerial

Question 3

What area of accounting prepares multi-purpose reports?

Accepted Answer

Financial

Answer

Managerial

Answer

Tax

Question 4

Why does accounting exist?

Accepted Answer

Help people make decisions

Answer

Ensure businesses are managed profitably

Answer

Give people jobs

Answer

Prepare tax returns

Question 5

What rules are followed in preparing financial accounting reports?

Accepted Answer

Generally Accepted Accounting Principles (GAAP)

Answer

Generally Endorsed Accounting Rules (GEAR)

Answer

Government Sanctioned Rules (GSR)

Answer

Internal Revenue Code (IRC)

Question 6

Which of the following best describes the accounting systems of most business organizations?

Accepted Answer

Accounting systems are designed to meet the needs of the business organization.

Answer

All accounting systems are identical.

Answer

Accounting systems only use publicly available data.

Answer

Accounting systems must be designed by a CPA firm that performs the annual financial audit.

Question 7

Which of the following are the basic functions of an accounting system?

Accepted Answer

To interpret and record the effects of business transactions.

Answer

To ensure that fraud does not occur.

Answer

To ensure that a business organization will be managed profitably.

Question 8

Which of the following best describes cost-effective?

Accepted Answer

Information is cost-effective if the value of producing information exceeds the cost of producing it.

Answer

Information is cost-effective if it helps management in controlling costs.

Answer

The information is generated by a computer-based accounting system.

Answer

Information is cost-effective if it is based on historical costs.

Question 9

Which of the following is not an objective of the system of internal controls?

Accepted Answer

Guarantee profitability

Answer

Produce reliable reports

Answer

Comply with laws and regulations

Answer

Run business effectively and efficiently

Question 10

Who is responsible for preparing the financial accounting reports?

Accepted Answer

Management

Answer

Independent Auditors

Answer

Government

Answer

IRS