Test Bank Survey of Accounting, 10th Edition by Carl Warren, 2025 update with correct answers rationale

TEST BANK FOR
SURVEY OF
ACCOUNTING
10TH EDITION BY
CARL WARREN,
AMANDA
FARMER LATEST
UPDATE




Page 1

,Chap 01 10e Warren


Indicate Whether The Statement Is True Or
False.
1. The Popularity Of The Sole Proprietorship Is Due To The Ease And Low Cost Of Organizing.
a. True
b. False

ANS: True


2. A Corporation Is A Business That Is Legally Separate And Distinct From Its Owners.
a. True
b. False

ANS: True

3. Merchandising Businesses Produce Products Rather Than Provide Services To Customers.
a. True
b. False

ANS: False

4. A Partnership Is Owned By Two Or More Individuals.
a. True
b. False

ANS: True

5. A Limited Liability Company Combines Attributes Of A Partnership And A Corporation.
a. True
b. False

ANS: True

6. The Ownership Of A Proprietorship Is Divided Into Shares Of Stock Owned By Its Stockholders’.
a. True
b. False

ANS: False

7. Accounting Is Often Called The "Language Of Business" Because Business Information Is Communicated
To Stakeholders.
a. True
b. False

ANS: True




Page 2

,Name: Class: Date:

Chap 01 10e Warren

8. 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
b. False

ANS: True

9. Creditors Have Preference To Assets Behind Stockholders’ If A Business Fails.
a. True
b. False

ANS: False

10. A Liability Is A Legal Obligation To Repay The Amount Borrowed According To The Terms Of The Borrowing
Agreement.
a. True
b. False

ANS: True

11. The Balance Sheet Represents The Accounting Equation.
a. True
b. False

ANS: True

12. A Primary Disadvantage Of Corporations Is That The Financial Resources Available To Them Are Limited.
a. True
b. False

ANS: False

13. Assets Are Acquired Through Investing Activities When Resources Are Purchased.
a. True
b. False

ANS: True

14. The Objective Of Most Businesses Is To Maximize Profits.
a. True
b. False

ANS: True




Page 3

, Name: Class: Date:

Chap 01 10e Warren

15. The Stockholders’' Equity Of A Company Should Equal The Sum Of Its Total Assets And Total Liabilities.
a. True
b. False

ANS: False

16. The Branch Of Accounting Related To The Management's Financial Decisions Is Known As Financial Accounting.
a. True
b. False

ANS: False

17. All Merchandising Businesses Are Organized As Corporations.
a. True
b. False

ANS: False

18. Stockholders’ Of A Corporation Are Its Internal Stakeholders.
a. True
b. False

ANS: False

19. The Basic Type Of Stock Issued To Owners Is Called Common Stock.
a. True
b. False

ANS: True

20. A Business Stakeholder Has An Interest In The Economic Performance Of A Company.
a. True
b. False

ANS: True

21. Manufacturing Businesses Change Basic Inputs Into Products That Are Sold To Individual Customers.
a. True
b. False

ANS: True

22. Companies Using A Low-Cost Emphasis Provide Products And Services That Compete On Features Other Than Price.
a. True
b. False

ANS: False

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