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 communicating
that 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 aprimary afunctions aof afinancial aaccounting aare ato ameasure abusiness aactivities aof aa
acompanyaand ato acommunicate athose ameasurements ato ainternal aparties afor adecision-making
apurposes.
Answer: a FALSE
Explanation: aFinancial aaccounting aprimarily aserves ato aprovide ainformation ato aexternal aparties.
aDifficulty: a2 aMedium
Topic: a Defining aAccounting
Learning aObjective: a 01-01 aDescribe athe atwo aprimary afunctions aof afinancial aaccounting.
aBloom's: aUnderstand
AACSB: aReflective aThinking
aAICPA: a BB aCritical
aThinking
, 5) Financing aactivities aare atransactions ainvolving aexternal asources aof afunding.
Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement
6) Investing aactivities ainclude athe apurchase aand asale aof along-term aresources.
Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement
7) Operating aactivities ainclude atransactions athat arelate ato athe aprimary aoperations aof athe acompany.
Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement
8) A acorporation ais aan aentity athat ais alegally aseparate afrom aits aowners.
Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
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 communicating
that 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 aprimary afunctions aof afinancial aaccounting aare ato ameasure abusiness aactivities aof aa
acompanyaand ato acommunicate athose ameasurements ato ainternal aparties afor adecision-making
apurposes.
Answer: a FALSE
Explanation: aFinancial aaccounting aprimarily aserves ato aprovide ainformation ato aexternal aparties.
aDifficulty: a2 aMedium
Topic: a Defining aAccounting
Learning aObjective: a 01-01 aDescribe athe atwo aprimary afunctions aof afinancial aaccounting.
aBloom's: aUnderstand
AACSB: aReflective aThinking
aAICPA: a BB aCritical
aThinking
, 5) Financing aactivities aare atransactions ainvolving aexternal asources aof afunding.
Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement
6) Investing aactivities ainclude athe apurchase aand asale aof along-term aresources.
Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement
7) Operating aactivities ainclude atransactions athat arelate ato athe aprimary aoperations aof athe acompany.
Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement
8) A acorporation ais aan aentity athat ais alegally aseparate afrom aits aowners.
Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
