Test Bank with Complete Answer Guide – Financial Accounting Fundamentals (8th Edition) By John Wild | All Chapters Covered | Rated A+ | Latest Edition

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Test Bank For
Financial Accounting Fundamentals, 8th Edition By John Wild
Chapter 1-13 Answers are at the End of Each Chapter

Chapter 01:
Student name:__________
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Accounting is an information and measurement system that identifies, records, and
N
communicates an organization's business activities.
⊚ true
⊚ false
U
2) Accounting includes the analysis and interpretation of information.




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⊚ true
R
⊚ false
SE
3) Financial accounting focuses on the needs of external users, who get accounting information
from general-purpose financial statements.
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e
⊚ true
⊚ false




d o
4) Internal users of accounting information do not directly manage the organization and have
D
limited access to its accounting information.




c
⊚ true




s
⊚ false
O
5) Auditors verify the effectiveness of internal controls.
⊚ true
C
⊚ false

6) External auditors examine financial statements to verify that they are prepared according to
S
generally accepted accounting principles.
⊚ true
⊚ false

7) External users include lenders, shareholders, customers, and regulators.
⊚ true
⊚ false




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8) Internal users include lenders, shareholders, brokers and nonexecutive employees.
⊚ true
⊚ false

9) Opportunities in accounting include auditing, consulting, market research, and tax planning.
⊚ true
⊚ false

10) The fraud triangle shows that three factors that push a person to commit fraud are
N
opportunity, pressure, and rationalization.
⊚ true
⊚ false
U
11) Internal controls are procedures to protect assets, ensure reliable accounting, promote




Prim
efficiency, and uphold company policies.
R
⊚ true
⊚ false
SE
12) A partnership is a business owned by two or more people.
⊚ true Primedocs



e
⊚ false




d
13) Owners of a corporation are called shareholders or stockholders.




o
⊚ true
D

c
⊚ false




s
O
14) In a partnership, the owners are called stockholders.
⊚ true
⊚ false
C
15) The balance sheet shows a company's net income or loss over a period of time.
⊚ true
⊚ false
S
16) The Financial Accounting Standards Board (FASB) is given the task of setting generally
accepted accounting principles (GAAP) from the Securities and Exchange Commission.
⊚ true
⊚ false




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17) The business entity assumption means that accounting information presumes that the
business will continue operating instead of being closed or sold.
⊚ true
⊚ false

18) GAAP wants information to have relevance and faithful representation.
⊚ true
⊚ false
N
19) The business entity assumption means that a business is accounted for separately from other
business entities and its owner(s).
⊚ true
U
⊚ false




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20) Revenues should not be recognized in the accounting records when earned, but rather when
R
cash is received.
⊚ true
⊚ false
SE
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21) Specific accounting principles are basic assumptions, concepts, and guidelines for preparing




e
financial statements and arise out of long-used accounting practice.




d
⊚ true
⊚ false




o
D

c
22) A sole proprietorship is a business with multiple owners.
⊚ true




s
O
⊚ false

23) Unlimited liability and separate taxation of the business are advantages of a sole
proprietorship.
C
⊚ true
⊚ false
S
24) Objectives, qualitative characteristics, elements, and recognition and measurement are
components of the FASB conceptual framework.
⊚ true
⊚ false




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