Test Bank - Accounting: Tools for Business Decision Making (8th Edition) Kimmel

ACCOUNTING
Tools for Business Decision Making

Test Bank
8th Edition




Authors
Paul D. Kimmel
Jerry J. Weygandt
Jill E. Mitchell
ISBN-13
9781119791034

Chapter 1. Introduction to Financial Statements
Chapter 2. A Further Look at Financial Statements
Chapter 3. The Accounting Information System
Chapter 4. Accrual Accounting Concepts
Chapter 5. Merchandising Operations and the Multiple-Step Income Statement
1|Page

,Chapter 6. Reporting and Analyzing Inventory
Chapter 7. Fraud, Internal Control, and Cash
Chapter 8. Reporting and Analyzing Receivables
Chapter 9. Reporting and Analyzing Long-Lived Assets
Chapter 10. Reporting and Analyzing Liabilities
Chapter 11. Reporting and Analyzing Stockholders' Equity
Chapter 12. Statement of Cash Flows
Chapter 13. Financial Analysis: The Big Picture
Chapter 14. Managerial Accounting
Chapter 15. Job Order Costing
Chapter 16. Process Costing
Chapter 17. Activity-Based Costing
Chapter 18. Cost-Volume-Profit
Chapter 19. Cost-Volume-Profit Analysis: Additional Issues
Chapter 20. Incremental Analysis
Chapter 21. Pricing
Chapter 22. Budgetary Planning
Chapter 23. Budgetary Control and Responsibility Accounting
Chapter 24. Standard Costs and Balanced Scorecard
Chapter 25. Planning for Capital Investments

CHAPTER NO. 01: INTRODUCTION TO FINANCIAL STATEMENTS

1) A business organized as a separate legal entity and owned by stockholders is a partnership.
Answer: FALSE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / Partnership
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

2) Corporate stockholders have no personal liability for the debts of the corporation.
Answer: TRUE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / Corporation
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

3) The liability of corporate stockholders is limited to the amount of their investment.
Answer: TRUE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / Corporation
Bloom / IFRS: K
2|Page

,AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

4) The majority of U.S. business is transacted by partnerships.
Answer: FALSE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / Partnership
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

5) Sole proprietorships in the United States generate more revenue than the other two forms of
business enterprise.
Answer: FALSE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / Sole
Proprietorship
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

6) Owners of business firms are the only people who need accounting information.
Answer: FALSE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / Users and
Uses of Financial Information
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

7) Some users of accounting information are internal to the company while others are external.
Answer: TRUE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / Users and
Uses of Financial Information
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

8) Management of a business enterprise is the major external user of accounting information.
Answer: FALSE
3|Page

, Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / External
Users
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

9) External users of accounting information include managers who plan, organize, and run a
business.
Answer: FALSE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / External
Users
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

10) The accounting information needs and questions of external users vary considerably.
Answer: TRUE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / External
Users
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

11) Accounting communicates financial information about a business to both internal and
external users.
Answer: TRUE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / Users and
Uses of Financial Information
Bloom / IFRS: K
AACSB / IMA: None / Reporting
AICPA: BC: Process and Resource Management Perspectives; AC: Reporting; PC: None
Minutes: 1

12) Two primary external users of accounting information are investors and creditors.
Answer: TRUE
Diff: 1
LO / Section / Sub: 1 / Business Organization and Accounting Information Uses / External
Users
Bloom / IFRS: K
4|Page