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 fprimary ffunctions fof ffinancial faccounting fare fto fmeasure fbusiness factivities fof fa
fcompanyfand fto fcommunicate fthose fmeasurements fto finternal fparties ffor fdecision-making
fpurposes.
Answer: f FALSE
Explanation: fFinancial faccounting fprimarily fserves fto fprovide finformation fto fexternal fparties.
fDifficulty: f2 fMedium
Topic: f Defining fAccounting
Learning fObjective: f 01-01 fDescribe fthe ftwo fprimary ffunctions fof ffinancial faccounting.
fBloom's: fUnderstand
AACSB: fReflective fThinking
fAICPA: f BB fCritical fThinking
, 5) Financing factivities fare ftransactions finvolving fexternal fsources fof ffunding.
Answer: fTRUE
fDifficulty: f1 fEasy
Topic: f Measuring fBusiness fActivities
Learning fObjective: f 01-02 fUnderstand fthe fbusiness factivities fthat ffinancial faccounting
fmeasures.
Bloom's: f Remember
fAACSB: f Reflective fThinking
fAICPA: f FN fMeasurement
6) Investing factivities finclude fthe fpurchase fand fsale fof flong-term fresources.
Answer: fTRUE
fDifficulty: f1 fEasy
Topic: f Measuring fBusiness fActivities
Learning fObjective: f 01-02 fUnderstand fthe fbusiness factivities fthat ffinancial faccounting
fmeasures.
Bloom's: f Remember
fAACSB: f Reflective fThinking
fAICPA: f FN fMeasurement
7) Operating factivities finclude ftransactions fthat frelate fto fthe fprimary foperations fof fthe fcompany.
Answer: fTRUE
fDifficulty: f1 fEasy
Topic: f Measuring fBusiness fActivities
Learning fObjective: f 01-02 fUnderstand fthe fbusiness factivities fthat ffinancial faccounting
fmeasures.
Bloom's: f Remember
fAACSB: f Reflective fThinking
fAICPA: f FN fMeasurement
8) A fcorporation fis fan fentity fthat fis flegally fseparate ffrom fits fowners.
Answer: fTRUE
fDifficulty: f1 fEasy
Topic: f Measuring fBusiness fActivities
Learning fObjective: f 01-02 fUnderstand fthe fbusiness factivities fthat ffinancial faccounting
fmeasures.
Bloom's: f f fRemember
fAACSB: fReflective fThinking
fAICPA: f BB fCritical fThinking
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 fprimary ffunctions fof ffinancial faccounting fare fto fmeasure fbusiness factivities fof fa
fcompanyfand fto fcommunicate fthose fmeasurements fto finternal fparties ffor fdecision-making
fpurposes.
Answer: f FALSE
Explanation: fFinancial faccounting fprimarily fserves fto fprovide finformation fto fexternal fparties.
fDifficulty: f2 fMedium
Topic: f Defining fAccounting
Learning fObjective: f 01-01 fDescribe fthe ftwo fprimary ffunctions fof ffinancial faccounting.
fBloom's: fUnderstand
AACSB: fReflective fThinking
fAICPA: f BB fCritical fThinking
, 5) Financing factivities fare ftransactions finvolving fexternal fsources fof ffunding.
Answer: fTRUE
fDifficulty: f1 fEasy
Topic: f Measuring fBusiness fActivities
Learning fObjective: f 01-02 fUnderstand fthe fbusiness factivities fthat ffinancial faccounting
fmeasures.
Bloom's: f Remember
fAACSB: f Reflective fThinking
fAICPA: f FN fMeasurement
6) Investing factivities finclude fthe fpurchase fand fsale fof flong-term fresources.
Answer: fTRUE
fDifficulty: f1 fEasy
Topic: f Measuring fBusiness fActivities
Learning fObjective: f 01-02 fUnderstand fthe fbusiness factivities fthat ffinancial faccounting
fmeasures.
Bloom's: f Remember
fAACSB: f Reflective fThinking
fAICPA: f FN fMeasurement
7) Operating factivities finclude ftransactions fthat frelate fto fthe fprimary foperations fof fthe fcompany.
Answer: fTRUE
fDifficulty: f1 fEasy
Topic: f Measuring fBusiness fActivities
Learning fObjective: f 01-02 fUnderstand fthe fbusiness factivities fthat ffinancial faccounting
fmeasures.
Bloom's: f Remember
fAACSB: f Reflective fThinking
fAICPA: f FN fMeasurement
8) A fcorporation fis fan fentity fthat fis flegally fseparate ffrom fits fowners.
Answer: fTRUE
fDifficulty: f1 fEasy
Topic: f Measuring fBusiness fActivities
Learning fObjective: f 01-02 fUnderstand fthe fbusiness factivities fthat ffinancial faccounting
fmeasures.
Bloom's: f f fRemember
fAACSB: fReflective fThinking
fAICPA: f BB fCritical fThinking
