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Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herrm
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Chapter 1 br A Framework for Financial Accounting
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1) Accounting is a system of maintaining records of a company's operations and communicating t
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hat information to decision makers.
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Answer: TRUE Dif b r br
ficulty: 1 Easy br br
Topic: Defining Accounting br
Learning Objective: 01- br
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking br br
AICPA: BB Critical Thinking br br
2) Accounting information is used by investors to decide whether to invest in a company's stock.
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Answer: TRUE Dif b r br
ficulty: 1 Easy br br
Topic: Defining Accounting br
Learning Objective: 01- br
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking br br
AICPA: BB Critical Thinking br br
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
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Answer: FALSE b r b r
Explanation:
Creditors lend money to a company. br br br br br br
Difficulty: 1 Easy br br
Topic: Defining Accounting br
Learning Objective: 01- br
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking br br
AICPA: BB Critical Thinking br br
4) The primary functions of financial accounting are to measure business activities of a company a
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nd to communicate those measurements to internal parties for decision-making purposes.
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Answer: FALSE b r b r
Explanation:
Financial accounting primarily serves to provide information to external parties. br br br br br br br br br br
Difficulty: 2 Medium br br
Topic: Defining Accounting br
,Learning Objective:
br 01-01 Describe the two primary functions of financial accounting.
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, Bloom's:
Understand AACSB: br
Reflective Thinking br br br
AICPA: BB Critical Thinking br br
5) Financing activities are transactions involving external sources of funding.
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Answer: TRUE Dif b r br
ficulty: 1 Easy
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Topic: Measuring Business Activities br br
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
Reflective Thinking br br
AICPA: FN Measurement br
6) Investing activities include the purchase and sale of long-term resources.
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Answer: TRUE Dif b r br
ficulty: 1 Easy
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Topic: Measuring Business Activities br br
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
Reflective Thinking br br
AICPA: FN Measurement br
7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUE Dif b r br
ficulty: 1 Easy
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Topic: Measuring Business Activities br br
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
Reflective Thinking br br
AICPA: FN Measurement br
8) A corporation is an entity that is legally separate from its owners.
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Answer: TRUE Dif b r br
ficulty: 1 Easy
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Topic: Measuring Business Activities br br
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
Reflective Thinking br br
AICPA: BB Critical Thinking br br
Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herrm
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ann
Chapter 1 br A Framework for Financial Accounting
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1) Accounting is a system of maintaining records of a company's operations and communicating t
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hat information to decision makers.
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Answer: TRUE Dif b r br
ficulty: 1 Easy br br
Topic: Defining Accounting br
Learning Objective: 01- br
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking br br
AICPA: BB Critical Thinking br br
2) Accounting information is used by investors to decide whether to invest in a company's stock.
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Answer: TRUE Dif b r br
ficulty: 1 Easy br br
Topic: Defining Accounting br
Learning Objective: 01- br
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking br br
AICPA: BB Critical Thinking br br
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
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Answer: FALSE b r b r
Explanation:
Creditors lend money to a company. br br br br br br
Difficulty: 1 Easy br br
Topic: Defining Accounting br
Learning Objective: 01- br
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking br br
AICPA: BB Critical Thinking br br
4) The primary functions of financial accounting are to measure business activities of a company a
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nd to communicate those measurements to internal parties for decision-making purposes.
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Answer: FALSE b r b r
Explanation:
Financial accounting primarily serves to provide information to external parties. br br br br br br br br br br
Difficulty: 2 Medium br br
Topic: Defining Accounting br
,Learning Objective:
br 01-01 Describe the two primary functions of financial accounting.
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, Bloom's:
Understand AACSB: br
Reflective Thinking br br br
AICPA: BB Critical Thinking br br
5) Financing activities are transactions involving external sources of funding.
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Answer: TRUE Dif b r br
ficulty: 1 Easy
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Topic: Measuring Business Activities br br
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
Reflective Thinking br br
AICPA: FN Measurement br
6) Investing activities include the purchase and sale of long-term resources.
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Answer: TRUE Dif b r br
ficulty: 1 Easy
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Topic: Measuring Business Activities br br
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
Reflective Thinking br br
AICPA: FN Measurement br
7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUE Dif b r br
ficulty: 1 Easy
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Topic: Measuring Business Activities br br
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
Reflective Thinking br br
AICPA: FN Measurement br
8) A corporation is an entity that is legally separate from its owners.
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Answer: TRUE Dif b r br
ficulty: 1 Easy
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Topic: Measuring Business Activities br br
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
Reflective Thinking br br
AICPA: BB Critical Thinking br br
