TEST BANK Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann
,TABLE OF CONTENTS
Chapter 1: A Framework for Financial Accounting
Chapter 2: The Accounting Cycle: During the Period
Chapter 3: The Accounting Cycle: End of the Period
Chapter 4: Cash and Internal Controls
Chapter 5: Receivables and Sales
Chapter 6: Inventory and Cost of Goods Sold
Chapter 7: Long-Term Assets
Chapter 8: Current Liabilities
Chapter 9: Long-Term Liabilities
Chapter 10: Stockholders’ Equity
Chapter 11: Statement of Cash Flows
Chapter 12: Financial Statement Analysis
,Chapter 1 A Framework for Financial Accounting
1) Accounting is a system of maintaining records of a company's operations and
communicatingthat information to decision makers.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical
Thinking
2) Accounting information is used by investors to decide whether to invest in a company's stock.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical
Thinking
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
Answer: FALSE
Explanation: Creditors lend money to a company.
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical
Thinking
4) The primary functions of financial accounting are to measure business activities of a
companyand to communicate those measurements to internal parties for decision-making
purposes.
Answer: FALSE
Explanation: Financial accounting primarily serves to provide information to external parties.
Difficulty: 2 Medium
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
Bloom's: Understand
, AACSB: iReflective
iThinkingiAICPA: i BB
iCritical iThinking
5) Financing iactivities iare itransactions iinvolving iexternal isources iof ifunding.
Answer: iTRUE
iDifficulty: i1
iEasy
Topic: i Measuring iBusiness iActivities
Learning iObjective: i 01-02 iUnderstand ithe ibusiness iactivities ithat ifinancial
iaccountingimeasures.
Bloom's: i Remember
iAACSB: i Reflective
iThinkingiAICPA: i FN
iMeasurement
6) Investing iactivities iinclude ithe ipurchase iand isale iof ilong-term iresources.
Answer: iTRUE
iDifficulty: i1
iEasy
Topic: i Measuring iBusiness iActivities
Learning iObjective: i 01-02 iUnderstand ithe ibusiness iactivities ithat ifinancial
iaccountingimeasures.
Bloom's: i Remember
iAACSB: i Reflective
iThinkingiAICPA: i FN
iMeasurement
7) Operating iactivities iinclude itransactions ithat irelate ito ithe iprimary ioperations iof ithe
icompany.
Answer: iTRUE
iDifficulty: i1
iEasy
Topic: i Measuring iBusiness iActivities
Learning iObjective: i 01-02 iUnderstand ithe ibusiness iactivities ithat ifinancial
iaccountingimeasures.
Bloom's: i Remember
iAACSB: i Reflective
iThinkingiAICPA: i FN
iMeasurement
8) A icorporation iis ian ientity ithat iis ilegally iseparate ifrom iits iowners.
Answer: iTRUE
iDifficulty: i1
iEasy
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann
,TABLE OF CONTENTS
Chapter 1: A Framework for Financial Accounting
Chapter 2: The Accounting Cycle: During the Period
Chapter 3: The Accounting Cycle: End of the Period
Chapter 4: Cash and Internal Controls
Chapter 5: Receivables and Sales
Chapter 6: Inventory and Cost of Goods Sold
Chapter 7: Long-Term Assets
Chapter 8: Current Liabilities
Chapter 9: Long-Term Liabilities
Chapter 10: Stockholders’ Equity
Chapter 11: Statement of Cash Flows
Chapter 12: Financial Statement Analysis
,Chapter 1 A Framework for Financial Accounting
1) Accounting is a system of maintaining records of a company's operations and
communicatingthat information to decision makers.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical
Thinking
2) Accounting information is used by investors to decide whether to invest in a company's stock.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical
Thinking
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
Answer: FALSE
Explanation: Creditors lend money to a company.
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical
Thinking
4) The primary functions of financial accounting are to measure business activities of a
companyand to communicate those measurements to internal parties for decision-making
purposes.
Answer: FALSE
Explanation: Financial accounting primarily serves to provide information to external parties.
Difficulty: 2 Medium
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
Bloom's: Understand
, AACSB: iReflective
iThinkingiAICPA: i BB
iCritical iThinking
5) Financing iactivities iare itransactions iinvolving iexternal isources iof ifunding.
Answer: iTRUE
iDifficulty: i1
iEasy
Topic: i Measuring iBusiness iActivities
Learning iObjective: i 01-02 iUnderstand ithe ibusiness iactivities ithat ifinancial
iaccountingimeasures.
Bloom's: i Remember
iAACSB: i Reflective
iThinkingiAICPA: i FN
iMeasurement
6) Investing iactivities iinclude ithe ipurchase iand isale iof ilong-term iresources.
Answer: iTRUE
iDifficulty: i1
iEasy
Topic: i Measuring iBusiness iActivities
Learning iObjective: i 01-02 iUnderstand ithe ibusiness iactivities ithat ifinancial
iaccountingimeasures.
Bloom's: i Remember
iAACSB: i Reflective
iThinkingiAICPA: i FN
iMeasurement
7) Operating iactivities iinclude itransactions ithat irelate ito ithe iprimary ioperations iof ithe
icompany.
Answer: iTRUE
iDifficulty: i1
iEasy
Topic: i Measuring iBusiness iActivities
Learning iObjective: i 01-02 iUnderstand ithe ibusiness iactivities ithat ifinancial
iaccountingimeasures.
Bloom's: i Remember
iAACSB: i Reflective
iThinkingiAICPA: i FN
iMeasurement
8) A icorporation iis ian ientity ithat iis ilegally iseparate ifrom iits iowners.
Answer: iTRUE
iDifficulty: i1
iEasy
