TB
Ac
Financial Accounting 13th Edition by
er
C. William Thomas & Wendy M. Tietz
TEST BANK
VERIFIED CHAPTER 1-12|
VERIFIED QUESTIONS AND
ACCURATE ANSWERS
1
, TB
Ac
Chapter 1: The Financial Statements
er
Learning Objective 1-1
1) Accounting is an information system that measures business activities. Correct Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
2) Bookkeeping is a mechanical part of accounting. Correct Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
3) Accounting is often called the language of business. Correct Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
4) Accounting produces financial statements, which report information about a business. Correct
Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement, Reporting
2
, TB
Ac
5) The accounting process begins and ends with people making decisions. Correct Answer> TRUE
Diff: 1
er
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
6) Accounting information is used by investors and creditors, but not by regulatory bodies. Correct
Answer> FALSE
Explanation: It is used by individuals, investors, creditors, nonprofits, and regulatory bodies.
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Industry Sector, Legal/Regulatory AICPA Functional: Measurement, Reporting
7) Since Habitat for Humanity is not concerned about making a profit, the entity does not need to use
accounting information.
Correct Answer> FALSE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Industry Sector, Legal/Regulatory AICPA Functional: Measurement, Reporting
8) The business records of a sole proprietorship should include the proprietor's personal finances. Correct
Answer> FALSE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
3
, TB
Ac
9) A partnership is a taxpaying entity. Correct Answer> FALSE
Diff: 1
er
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
10) Stockholders have no personal obligation for the corporation's debts. Correct Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
11) Accounting:
A) measures business activities.
B) processes data into reports and communicates the data to decision makers.
C) is often called the language of business.
D) is all of the above. Correct Answer> D
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement, Reporting
12) A disadvantage of general partnerships is:
A) double taxation of distributed profits.
B) the partnership's assets are commingled with each partner's personal assets.
4
Ac
Financial Accounting 13th Edition by
er
C. William Thomas & Wendy M. Tietz
TEST BANK
VERIFIED CHAPTER 1-12|
VERIFIED QUESTIONS AND
ACCURATE ANSWERS
1
, TB
Ac
Chapter 1: The Financial Statements
er
Learning Objective 1-1
1) Accounting is an information system that measures business activities. Correct Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
2) Bookkeeping is a mechanical part of accounting. Correct Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
3) Accounting is often called the language of business. Correct Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
4) Accounting produces financial statements, which report information about a business. Correct
Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement, Reporting
2
, TB
Ac
5) The accounting process begins and ends with people making decisions. Correct Answer> TRUE
Diff: 1
er
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
6) Accounting information is used by investors and creditors, but not by regulatory bodies. Correct
Answer> FALSE
Explanation: It is used by individuals, investors, creditors, nonprofits, and regulatory bodies.
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Industry Sector, Legal/Regulatory AICPA Functional: Measurement, Reporting
7) Since Habitat for Humanity is not concerned about making a profit, the entity does not need to use
accounting information.
Correct Answer> FALSE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Industry Sector, Legal/Regulatory AICPA Functional: Measurement, Reporting
8) The business records of a sole proprietorship should include the proprietor's personal finances. Correct
Answer> FALSE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
3
, TB
Ac
9) A partnership is a taxpaying entity. Correct Answer> FALSE
Diff: 1
er
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
10) Stockholders have no personal obligation for the corporation's debts. Correct Answer> TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory AICPA Functional: Measurement
11) Accounting:
A) measures business activities.
B) processes data into reports and communicates the data to decision makers.
C) is often called the language of business.
D) is all of the above. Correct Answer> D
Diff: 2
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement, Reporting
12) A disadvantage of general partnerships is:
A) double taxation of distributed profits.
B) the partnership's assets are commingled with each partner's personal assets.
4
