TEST BANK for Financial Accounting 13th Edition by C William Thomas and Wendy M. Tietz Verified Chapter's 1 - 12 | Complete

Franklyn A Plus Pass




TEST BANK for Financial Accounting
13th Edition by C. William Thomas &
Wendy M. Tietz
All Chapters 1-12 With True/False & Multiple Choice
Questions| A+ GRADED
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Chapter 1 The Financial Statements

Learning Objective 1-1

1) Accounting is an information system that measures business activities. Correct Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Reflective Thinking

AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement



2) Bookkeeping is a mechanical part of accounting. Correct Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Reflective Thinking

AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement



3) Accounting is often called the language of business. Correct Answer: TRUE

Diff: 1

LO: 1-1
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AACSB: Reflective Thinking
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AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
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4) Accounting produces financial statements, which report information about a business. Correct Answer:
TRUE
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Diff: 1
A




LO: 1-1
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AACSB: Reflective Thinking
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AICPA Bus Persp: Legal/Regulatory

AICPA Functional: Measurement, Reporting
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5) The accounting process begins and ends with people making decisions. Correct Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Reflective Thinking

AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement



6) Accounting information is used by investors and creditors, but not by regulatory bodies. Correct
Answer: FALSE

Explanation: It is used by individuals, investors, creditors, nonprofits, and regulatory bodies.

Diff: 1

LO: 1-1

AACSB: Reflective Thinking

AICPA Bus Persp: Industry Sector, Legal/Regulatory AICPA Functional: Measurement, Reporting



7) Since Habitat for Humanity is not concerned about making a profit, the entity does not need to use
accounting information.

Correct Answer: FALSE
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Diff: 1

LO: 1-1
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AACSB: Reflective Thinking
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AICPA Bus Persp: Industry Sector, Legal/Regulatory AICPA Functional: Measurement, Reporting
yn
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8) The business records of a sole proprietorship should include the proprietor's personal finances. Correct
Answer: FALSE
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Diff: 1
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LO: 1-1
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AACSB: Reflective Thinking

AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
Pa




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9) A partnership is a taxpaying entity. Correct Answer: FALSE

Diff: 1

LO: 1-1

AACSB: Reflective Thinking

AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement



10) Stockholders have no personal obligation for the corporation's debts. Correct Answer: TRUE

Diff: 1

LO: 1-1

AACSB: Reflective Thinking

AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement



11) Accounting:

A) measures business activities.

B) processes data into reports and communicates the data to decision makers.

C) is often called the language of business.

D) is all of the above. Correct Answer: D
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Diff: 2
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LO: 1-1
kl




AACSB: Reflective Thinking
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AICPA Bus Persp: Legal/Regulatory

AICPA Functional: Measurement, Reporting
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A




12) A disadvantage of general partnerships is:
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A) double taxation of distributed profits.
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B) the partnership's assets are commingled with each partner's personal assets.
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