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TestBankforChapter1
MultipleChoiceQuestions
1.Whichofthefollowingvariablesplayaroleinshapingaccountingdevelopment?
a.natureofcapitalmarketsb.typeofreportingregimec.typeofbusinessentitiesd.Alloftheabove.
e.Bothaandc.
2.Highlevelsoffinancialdisclosurearegenerallyfoundincountries
a.wherebusinessesraisetheircapitalfromalargeanddiverseinvestor/creditorgroup.
b.wherebusinessesraisetheircapitalfromthegovernment.
c.wherethereisalimitednumberofowners.
d.wherethesophisticationofthefinancialcommunityisnotveryhigh.e.wherethecostofpublishingfinancialstatementsishigh.
3.Incountrieswherebusinesscapitalneedsareprovidedbyonlyafewverylargebanks
a.thelevelofdisclosureinfinancialstatementstendstobehigh.
paniestendtodevotesignificantresourcestomaketheirannualreportsattractive.
paniestendtouseincome-increasingaccountingmethods.
paniestendtounderstatereportedearnings.e.Alloftheabove.
4.Whichofthefollowingdoesnotaffectacountrysfinancialaccountingorientation?
a.Thelevelofinflation.
b.Politicalandeconomictieswithothercountries.
c.Statusoftheaccountingprofession.
d.Qualityofaccountingeducation.
e.Alloftheaboveaffectacountrysfinancialaccountingorientation.
5.Incountrieswithmicro-orientedaccountingsystems,theroleofaccountingisa.toprovideinvestorswithinformationonthetruepositionofcompanies.
b.toreflecttheeffectofgovernmenteconomicpoliciesincompanyaccounts.c.toprovideinputsforindustryornationalaccountingreports.
d.todeterminethetaxliabilityofbusinessentities.e.Alloftheabove.
6.Whichofthefollowingisnottrueaboutaccountingsroleinamacro-orientedenvironment,
a.toprovideinvestorswithinformationonthetruepositionofcompanies.
b.toreflecttheeffectofgovernmenteconomicpoliciesincompanyaccounts.c.toprovideinputsforindustryornational
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