,Test Bank For Survey of Accounting 8th Edition
Chapter 1. The Role of Accounting in Business.
Chapter 1. The Role of Accounting in Business.
1. 001: The objective of most businesses is to maximize profits....
The objective of most businesses is to maximize profits.
*a. True
b. False
2. 002: A limited liability company combines attributes of a partne
A limited liability company combines attributes of a partnership and a
corporation.
*a. True
b. False
3. 003: A partnership is owned by two or more individuals....
A partnership is owned by two or more individuals.
*a. True
b. False
4. 004: Manufacturing businesses change basic inputs into products
Manufacturing businesses change basic inputs into products that are
sold to individual customers.
*a. True
b. False
5. 005: Merchandising businesses produce products rather than provi
Merchandising businesses produce products rather than provide services
to customers.
a. True
*b. False
6. 006: A corporation is a business that is legally separate and di
A corporation is a business that is legally separate and distinct from
its owners.
*a. True
b. False
7. 007: The popularity of the sole proprietorship is due to the eas
The popularity of the sole proprietorship is due to the ease and low
cost of organizing.
*a. True
b. False
1
,Test Bank For Survey of Accounting 8th Edition
Chapter 1. The Role of Accounting in Business.
8. 008: A primary disadvantage of corporations is that the financia
A primary disadvantage of corporations is that the financial resources
available to them are limited.
a. True
*b. False
9. 009: The ownership of a proprietorship is divided into shares of
The ownership of a proprietorship is divided into shares of stock owned
by its stockholders.
a. True
*b. False
10. 010: All merchandising businesses are organized as corporations.
All merchandising businesses are organized as corporations.
a. True
*b. False
11. 011: Stockholders of a corporation are its internal stakeholders
Stockholders of a corporation are its internal stakeholders.
a. True
*b. False
12. 012: John Deere is a leading manufacturer of agricultural machin
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
emphasis to attract customers.
*a. True
b. False
13. 013: A business stakeholder has an interest in the economic perf
A business stakeholder has an interest in the economic performance of a
business.
*a. True
b. False
14. 014: Companies using a low-cost emphasis provide products and se
Companies using a low-cost emphasis provide products and services that
compete on features other than price.
2
, Test Bank For Survey of Accounting 8th Edition
Chapter 1. The Role of Accounting in Business.
a. True
*b. False
15. 015: The basic type of stock issued to owners is called common s
The basic type of stock issued to owners is called common stock.
*a. True
b. False
16. 016: Assets are acquired through investing activities when resou
Assets are acquired through investing activities when resources are
purchased.
*a. True
b. False
17. 017: Creditors have preference to assets behind stockholders if
Creditors have preference to assets behind stockholders if a business
fails.
a. True
*b. False
18. 018: A liability is a legal obligation to repay the amount borro
A liability is a legal obligation to repay the amount borrowed
according to the terms of the borrowing agreement.
*a. True
b. False
19. 019: Accounting is thought to be the "language of b
Accounting is thought to be the "language of business" because business
information is communicated to stakeholders.
*a. True
b. False
20. 020: The branch of accounting related to the managementâ™s fina
The branch of accounting related to the management's financial
decisions is known as financial accounting.
a. True
*b. False
21. 021: The stockholdersâ™ equity of a company should equal the su
The stockholders' equity of a company should equal the sum of its total
assets and total liabilities.
3
Chapter 1. The Role of Accounting in Business.
Chapter 1. The Role of Accounting in Business.
1. 001: The objective of most businesses is to maximize profits....
The objective of most businesses is to maximize profits.
*a. True
b. False
2. 002: A limited liability company combines attributes of a partne
A limited liability company combines attributes of a partnership and a
corporation.
*a. True
b. False
3. 003: A partnership is owned by two or more individuals....
A partnership is owned by two or more individuals.
*a. True
b. False
4. 004: Manufacturing businesses change basic inputs into products
Manufacturing businesses change basic inputs into products that are
sold to individual customers.
*a. True
b. False
5. 005: Merchandising businesses produce products rather than provi
Merchandising businesses produce products rather than provide services
to customers.
a. True
*b. False
6. 006: A corporation is a business that is legally separate and di
A corporation is a business that is legally separate and distinct from
its owners.
*a. True
b. False
7. 007: The popularity of the sole proprietorship is due to the eas
The popularity of the sole proprietorship is due to the ease and low
cost of organizing.
*a. True
b. False
1
,Test Bank For Survey of Accounting 8th Edition
Chapter 1. The Role of Accounting in Business.
8. 008: A primary disadvantage of corporations is that the financia
A primary disadvantage of corporations is that the financial resources
available to them are limited.
a. True
*b. False
9. 009: The ownership of a proprietorship is divided into shares of
The ownership of a proprietorship is divided into shares of stock owned
by its stockholders.
a. True
*b. False
10. 010: All merchandising businesses are organized as corporations.
All merchandising businesses are organized as corporations.
a. True
*b. False
11. 011: Stockholders of a corporation are its internal stakeholders
Stockholders of a corporation are its internal stakeholders.
a. True
*b. False
12. 012: John Deere is a leading manufacturer of agricultural machin
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
emphasis to attract customers.
*a. True
b. False
13. 013: A business stakeholder has an interest in the economic perf
A business stakeholder has an interest in the economic performance of a
business.
*a. True
b. False
14. 014: Companies using a low-cost emphasis provide products and se
Companies using a low-cost emphasis provide products and services that
compete on features other than price.
2
, Test Bank For Survey of Accounting 8th Edition
Chapter 1. The Role of Accounting in Business.
a. True
*b. False
15. 015: The basic type of stock issued to owners is called common s
The basic type of stock issued to owners is called common stock.
*a. True
b. False
16. 016: Assets are acquired through investing activities when resou
Assets are acquired through investing activities when resources are
purchased.
*a. True
b. False
17. 017: Creditors have preference to assets behind stockholders if
Creditors have preference to assets behind stockholders if a business
fails.
a. True
*b. False
18. 018: A liability is a legal obligation to repay the amount borro
A liability is a legal obligation to repay the amount borrowed
according to the terms of the borrowing agreement.
*a. True
b. False
19. 019: Accounting is thought to be the "language of b
Accounting is thought to be the "language of business" because business
information is communicated to stakeholders.
*a. True
b. False
20. 020: The branch of accounting related to the managementâ™s fina
The branch of accounting related to the management's financial
decisions is known as financial accounting.
a. True
*b. False
21. 021: The stockholdersâ™ equity of a company should equal the su
The stockholders' equity of a company should equal the sum of its total
assets and total liabilities.
3
