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 sprimary sfunctions sof sfinancial saccounting sare sto smeasure sbusiness sactivities sof sa
scompanysand sto scommunicate sthose smeasurements sto sinternal sparties sfor sdecision-making
spurposes.
Answer: s FALSE
Explanation: sFinancial saccounting sprimarily sserves sto sprovide sinformation sto sexternal sparties.
sDifficulty: s2 sMedium
Topic: s Defining sAccounting
Learning sObjective: s 01-01 sDescribe sthe stwo sprimary sfunctions sof sfinancial saccounting.
sBloom's: sUnderstand
AACSB: sReflective sThinking
sAICPA: s BB sCritical sThinking
, 5) Financing sactivities sare stransactions sinvolving sexternal ssources sof sfunding.
Answer: sTRUE
sDifficulty: s1
sEasy
Topic: s Measuring sBusiness sActivities
Learning sObjective: s 01-02 sUnderstand sthe sbusiness sactivities sthat sfinancial saccounting
smeasures.
Bloom's: s Remember
sAACSB: s Reflective sThinking
sAICPA: s FN sMeasurement
6) Investing sactivities sinclude sthe spurchase sand ssale sof slong-term sresources.
Answer: sTRUE
sDifficulty: s1
sEasy
Topic: s Measuring sBusiness sActivities
Learning sObjective: s 01-02 sUnderstand sthe sbusiness sactivities sthat sfinancial saccounting
smeasures.
Bloom's: s Remember
sAACSB: s Reflective sThinking
sAICPA: s FN sMeasurement
7) Operating sactivities sinclude stransactions sthat srelate sto sthe sprimary soperations sof sthe scompany.
Answer: sTRUE
sDifficulty: s1
sEasy
Topic: s Measuring sBusiness sActivities
Learning sObjective: s 01-02 sUnderstand sthe sbusiness sactivities sthat sfinancial saccounting
smeasures.
Bloom's: s Remember
sAACSB: s Reflective sThinking
sAICPA: s FN sMeasurement
8) A scorporation sis san sentity sthat sis slegally sseparate sfrom sits sowners.
Answer: sTRUE
sDifficulty: s1
sEasy
Topic: s Measuring sBusiness sActivities
Learning sObjective: s 01-02 sUnderstand sthe sbusiness sactivities sthat sfinancial saccounting
smeasures.
Bloom's: s s sRemember
sAACSB: sReflective sThinking
sAICPA: s BB sCritical sThinking
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 sprimary sfunctions sof sfinancial saccounting sare sto smeasure sbusiness sactivities sof sa
scompanysand sto scommunicate sthose smeasurements sto sinternal sparties sfor sdecision-making
spurposes.
Answer: s FALSE
Explanation: sFinancial saccounting sprimarily sserves sto sprovide sinformation sto sexternal sparties.
sDifficulty: s2 sMedium
Topic: s Defining sAccounting
Learning sObjective: s 01-01 sDescribe sthe stwo sprimary sfunctions sof sfinancial saccounting.
sBloom's: sUnderstand
AACSB: sReflective sThinking
sAICPA: s BB sCritical sThinking
, 5) Financing sactivities sare stransactions sinvolving sexternal ssources sof sfunding.
Answer: sTRUE
sDifficulty: s1
sEasy
Topic: s Measuring sBusiness sActivities
Learning sObjective: s 01-02 sUnderstand sthe sbusiness sactivities sthat sfinancial saccounting
smeasures.
Bloom's: s Remember
sAACSB: s Reflective sThinking
sAICPA: s FN sMeasurement
6) Investing sactivities sinclude sthe spurchase sand ssale sof slong-term sresources.
Answer: sTRUE
sDifficulty: s1
sEasy
Topic: s Measuring sBusiness sActivities
Learning sObjective: s 01-02 sUnderstand sthe sbusiness sactivities sthat sfinancial saccounting
smeasures.
Bloom's: s Remember
sAACSB: s Reflective sThinking
sAICPA: s FN sMeasurement
7) Operating sactivities sinclude stransactions sthat srelate sto sthe sprimary soperations sof sthe scompany.
Answer: sTRUE
sDifficulty: s1
sEasy
Topic: s Measuring sBusiness sActivities
Learning sObjective: s 01-02 sUnderstand sthe sbusiness sactivities sthat sfinancial saccounting
smeasures.
Bloom's: s Remember
sAACSB: s Reflective sThinking
sAICPA: s FN sMeasurement
8) A scorporation sis san sentity sthat sis slegally sseparate sfrom sits sowners.
Answer: sTRUE
sDifficulty: s1
sEasy
Topic: s Measuring sBusiness sActivities
Learning sObjective: s 01-02 sUnderstand sthe sbusiness sactivities sthat sfinancial saccounting
smeasures.
Bloom's: s s sRemember
sAACSB: sReflective sThinking
sAICPA: s BB sCritical sThinking
