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Test Bank for Financial Accounting, 13th Edition by C. William Thomas & Wendy M. Tietz | Complete Practice Questions with Answers & Detailed Rationales

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Prepare confidently for Financial Accounting, 13th Edition by C. William Thomas and Wendy M. Tietz with this comprehensive accounting study resource. Pearson lists the 13th Edition as published in 2021 with © 2022 Pearson Education, Inc., and identifies the text as covering fundamental financial accounting concepts and progressively more challenging problems. The textbook contains 12 chapters, covering financial statements, transaction analysis, accrual accounting, internal controls, receivables, inventory, plant assets, liabilities, stockholders' equity, cash flows, and financial statement analysis. KEY TOPICS COVERED Financial Statements: Balance sheets, income statements, statements of retained earnings, and understanding how financial information supports business decisions. Transaction Analysis: Accounting equations, business transactions, journal entries, and effects on financial statements. Accrual Accounting: Revenue recognition, expense recognition, adjusting entries, accruals, deferrals, and income measurement. Internal Control & Cash: Internal control principles, cash management, bank reconciliations, fraud prevention, and safeguarding assets. Receivables & Revenue: Accounts receivable, notes receivable, bad debts, allowance methods, and revenue-related accounting. Inventory: Inventory systems, cost of goods sold, inventory valuation, purchases and sales, and inventory analysis. Plant Assets & Intangibles: Property, plant and equipment, depreciation, natural resources, intangible assets, and asset disposal. Liabilities: Current liabilities, contingent liabilities, payroll-related obligations, and recognition and measurement of liabilities. Long-Term Liabilities: Bonds, notes payable, interest, debt financing, and long-term obligation accounting. Stockholders' Equity: Common and preferred stock, dividends, retained earnings, treasury stock, and equity transactions. Statement of Cash Flows: Operating, investing, and financing activities, cash-flow classification, and preparation and interpretation of cash-flow information. Financial Statement Analysis: Financial ratios, profitability, liquidity, solvency, efficiency, and evaluating company performance. WHY THIS STUDY RESOURCE IS USEFUL Comprehensive 13th Edition accounting review Practice questions with correct answers Detailed explanations and rationales Chapters 1–12 coverage Journal-entry and transaction-analysis practice Financial-statement preparation Inventory and receivables review Liability and equity accounting Cash-flow analysis Financial-ratio practice Useful for accounting quizzes, midterms, and finals Pearson also describes the 13th Edition as using reader-friendly examples, author-created videos, cases, and real-world accounting applications to help students understand and apply financial-accounting concepts.

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DOWNLOAD THE Test Bank for Financial Accounting 13th Edition Thomas



Financial Accounting, 13e (Thomas/Tietz)
Chapter 1 The Financial Statements

Learning Objective 1-1

1) Accounting is an information system that measures business activities.
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.
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.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

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

5) The accounting process begins and ends with people making decisions.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement




1
Copyright © 2022 Pearson Education, Inc.
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,DOWNLOAD THE Test Bank for Financial Accounting 13th Edition Thomas



6) Accounting information is used by investors and creditors, but not by regulatory bodies.
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.
Answer: FALSE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Industry Sector, Legal/Regulatory
AICPA Functional: Measurement, Reporting

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

9) A partnership is a taxpaying entity.
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.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement




2
Copyright © 2022 Pearson Education, Inc.
mynursytest.store

,DOWNLOAD THE Test Bank for Financial Accounting 13th Edition Thomas



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.
Answer: D
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement, Reporting

12) A disadvantage of general partnerships is:
A) double taxation of distributed profits.
B) the partnership's assets are commingled with each partner's personal assets.
C) only individuals can be partners.
D) each partner may conduct business in the name of the entity and make agreements that legally bind
all partners.
Answer: D
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

13) Which of the following statements is TRUE for a limited liability company?
A) Members have unlimited liability for the debts of the business.
B) Members have limited liability for debts only up to the extent of their investment in the LLC.
C) The owners have unlimited liability for the debts of the business.
D) Members are not taxed like members of a partnership.
Answer: B
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

14) Which of the following statements is TRUE for a limited liability partnership?
A) All partners have limited liability for the debts of the partnership.
B) All the partners are considered to be limited partners.
C) The general partner has unlimited liability for the debts of the partnership.
D) The limited partners have unlimited liability for the debts of the partnership.
Answer: C
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement




3
Copyright © 2022 Pearson Education, Inc.
mynursytest.store

, DOWNLOAD THE Test Bank for Financial Accounting 13th Edition Thomas



15) Which of the following statements is TRUE for a proprietorship?
A) Legally, a proprietorship is separate from the proprietor.
B) For accounting purposes, a proprietorship is separate from the proprietor.
C) The business records include the proprietor's personal finances.
D) All statements are correct.
Answer: B
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

16) Federal income taxes are paid by the in a limited liability company.
A) company
B) limited partners only
C) general partners only
D) members
Answer: D
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement, Reporting

17) Which of the following statements is TRUE for a limited liability partnership?
A) The partnership pays no federal income taxes.
B) Only the limited partners pay federal income taxes on their shares of the partnership's profits.
C) Only the general partner pays federal income taxes on his or her share of the partnership's profits.
D) Only the members pay federal income taxes on their shares of the partnership's profits.
Answer: A
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement, Reporting

18) Which statement is TRUE about partnerships?
A) A partnership is a taxpaying entity.
B) General partnerships have mutual agency and limited liability.
C) Individuals, corporations, partnerships, or other types of entities can be partners.
D) A written partnership contract must exist.
Answer: C
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement




4
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Walter T. Harrison, Themin Suwardy, Wendy M. Tietz, Charles Horngren, C. William Thomas Financial Accounting, eBook, Global Edition
Publisher: 2023 ISBN: 9781292412870 Edition: Unknown

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