Test Bank - Survey of Accounting 10th Edition Test Bank – Carl Warren & Amanda Farmer | Complete Chapters 1–14 | Verified Accounting Exam Prep & Instructor Resource

Name: Class: Date:



TEST BANK
Survey of Accounting, 10th edition
By Carl Warren and Amanda Farmer.
(Chapter 1-14| Latest Edition)




C
LE
ST
BE

,Name: Class: Date:
Answers Provided at the End of Each Chapter

Chapter 1

Indicate whether the statement is true or false.

1. A business stakeholder has an interest in the economic performance of a company.
a. True
b. False

2. The ownership of a proprietorship is divided into shares of stock owned by its stockholders.
a. True
b. False

3. Creditors have preference to assets behind stockholders if a business fails.
a. True
b. False




C
4. Manufacturing businesses change basic inputs into products that are sold to individual customers.
a. True LE
b. False

5. The stockholders' equity of a company should equal the sum of its total assets and total liabilities.
a. True
ST
b. False

6. Assets are acquired through investing activities when resources are purchased.
a. True
BE


b. False

7. A primary disadvantage of corporations is that the financial resources available to them are limited.
a. True
b. False

8. A limited liability company combines attributes of a partnership and a corporation.
a. True
b. False

9. John Deere is a leading manufacturer of agricultural machinery in the world, producing products that serve unique
market needs. Therefore, John Deere is an example of a company that uses a premium-price approach to attract customers.
a. True

,Name: Class: Date:

b. False

10. A corporation is a business that is legally separate and distinct from its owners.
a. True
b. False

11. Stockholders of a corporation are its internal stakeholders.
a. True
b. False

12. A partnership is owned by two or more individuals.
a. True
b. False

13. The balance sheet represents the accounting equation.
a. True




C
b. False
LE
14. The popularity of the sole proprietorship is due to the ease and low cost of organizing.
a. True
b. False
ST
15. Accounting is often called the "language of business" because business information is communicated to stakeholders.
a. True
b. False
BE


16. The basic type of stock issued to owners is called common stock.
a. True
b. False

17. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing agreement.
a. True
b. False

18. All merchandising businesses are organized as corporations.
a. True
b. False

19. The objective of most businesses is to maximize profits.
a. True
b. False

20. The branch of accounting related to the management's financial decisions is known as financial accounting.

, Name: Class: Date:

a. True
b. False

21. Merchandising businesses produce products rather than provide services to customers.
a. True
b. False

22. Companies using a low-cost emphasis provide products and services that compete on features other than price.
a. True
b. False


Indicate the answer choice that best completes the statement or answers the question.

23. Under a , a business designs products that possess unique attributes or characteristics for which customers are
willing to pay more.
a. premium-price approach




C
b. outreach approach
c. low-cost approach
d. customer approach
LE
24. The performance evaluation of the managers of a company is dependent on the company's .
a. common stock
ST
b. volatility
c. economic performance
d. nonrecurring activities
BE


25. is the increase in assets from selling products or providing services.
a. Revenue
b. Interest income
c. Equity
d. Cost of goods sold

26. A financial statement that summarizes the cash receipts and cash payments of a company for a specific period of time
is .
a. the cash analysis statement
b. the bank reconciliation statement
c. the statement of cash flows
d. the statement of retained and nonretained cash earnings

27. Simmon's Inc., had the following account balances on June 30, 20Y9. What is Simmon's net income for the month of
June?


Accounts Payable $ 8,900