,TEST BANK FOR pn pn
Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herr
pn pn pn pn pn pn pn pn pn pn
mann
Chapter 1 pn A Framework for Financial Accounting
pn pn pn pn
1) Accounting is a system of maintaining records of a company's operations and communicating
pn pn pn pn pn pn pn pn pn pn pn pn pn
that information to decision makers.
pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy pn pn
Topic: Defining Accounting pn
Learning Objective: 01- pn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
pn pn pn pn pn pn pn pn pn
AACSB:
Reflective Thinking pn pn
AICPA: BB Critical Thinking pn pn
2) Accounting information is used by investors to decide whether to invest in a company's stock.
pn pn pn pn pn pn pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy pn pn
Topic: Defining Accounting pn
Learning Objective: 01- pn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
pn pn pn pn pn pn pn pn pn
AACSB:
Reflective Thinking pn pn
AICPA: BB Critical Thinking pn pn
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
pn pn pn pn pn pn pn pn pn pn pn pn pn pn
Answer: FALSE p n p n
Explanation:
Creditors lend money to a company. pn pn pn pn pn pn
Difficulty: 1 Easy pn pn
Topic: Defining Accounting pn
Learning Objective: 01- pn
01 Describe the two primary functions of financial accounting. Bloom's:
pn pn pn pn pn pn pn pn pn
Remember
AACSB:
Reflective Thinking pn pn
AICPA: BB Critical Thinking pn pn
4) The primary functions of financial accounting are to measure business activities of a company
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and to communicate those measurements to internal parties for decision-making purposes.
pn pn pn pn pn pn pn pn pn pn
Answer: FALSE p n p n
Explanation:
Financial accounting primarily serves to provide information to external parties. pn pn pn pn pn pn pn pn pn pn
Difficulty: 2 Medium pn pn
,Topic: Defining Accounting
pn
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
pn pn pn pn pn pn pn pn pn
, Bloom's:
Understand AACSB: pn
Reflective Thinking pn pn pn
AICPA: BB Critical Thinking pn pn
5) Financing activities are transactions involving external sources of funding.
pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy
pn pn
Topic: Measuring Business Activities pn pn
Learning Objective: 01-
pn
02 Understand the business activities that financial accounting measures. Bloom's:
pn pn pn pn pn pn pn pn pn Remember
AACSB:
Reflective Thinking pn pn
AICPA: FN Measurement pn
6) Investing activities include the purchase and sale of long-term resources.
pn pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy
pn pn
Topic: Measuring Business Activities pn pn
Learning Objective: 01-
pn
02 Understand the business activities that financial accounting measures. Bloom's:
pn pn pn pn pn pn pn pn pn Remember
AACSB:
Reflective Thinking pn pn
AICPA: FN Measurement pn
7) Operating activities include transactions that relate to the primary operations of the company.
pn pn pn pn pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy
pn pn
Topic: Measuring Business Activities pn pn
Learning Objective: 01-
pn
02 Understand the business activities that financial accounting measures. Bloom's:
pn pn pn pn pn pn pn pn pn Remember
AACSB:
Reflective Thinking pn pn
AICPA: FN Measurement pn
8) A corporation is an entity that is legally separate from its owners.
pn pn pn pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy
pn pn
Topic: Measuring Business Activities pn pn
Learning Objective: 01-
pn
02 Understand the business activities that financial accounting measures. Bloom's:
pn pn pn pn pn pn pn pn pn Remember
AACSB:
Reflective Thinking pn pn
AICPA: BB Critical Thinking pn pn
Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herr
pn pn pn pn pn pn pn pn pn pn
mann
Chapter 1 pn A Framework for Financial Accounting
pn pn pn pn
1) Accounting is a system of maintaining records of a company's operations and communicating
pn pn pn pn pn pn pn pn pn pn pn pn pn
that information to decision makers.
pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy pn pn
Topic: Defining Accounting pn
Learning Objective: 01- pn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
pn pn pn pn pn pn pn pn pn
AACSB:
Reflective Thinking pn pn
AICPA: BB Critical Thinking pn pn
2) Accounting information is used by investors to decide whether to invest in a company's stock.
pn pn pn pn pn pn pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy pn pn
Topic: Defining Accounting pn
Learning Objective: 01- pn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
pn pn pn pn pn pn pn pn pn
AACSB:
Reflective Thinking pn pn
AICPA: BB Critical Thinking pn pn
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
pn pn pn pn pn pn pn pn pn pn pn pn pn pn
Answer: FALSE p n p n
Explanation:
Creditors lend money to a company. pn pn pn pn pn pn
Difficulty: 1 Easy pn pn
Topic: Defining Accounting pn
Learning Objective: 01- pn
01 Describe the two primary functions of financial accounting. Bloom's:
pn pn pn pn pn pn pn pn pn
Remember
AACSB:
Reflective Thinking pn pn
AICPA: BB Critical Thinking pn pn
4) The primary functions of financial accounting are to measure business activities of a company
pn pn pn pn pn pn pn pn pn pn pn pn pn pn
and to communicate those measurements to internal parties for decision-making purposes.
pn pn pn pn pn pn pn pn pn pn
Answer: FALSE p n p n
Explanation:
Financial accounting primarily serves to provide information to external parties. pn pn pn pn pn pn pn pn pn pn
Difficulty: 2 Medium pn pn
,Topic: Defining Accounting
pn
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
pn pn pn pn pn pn pn pn pn
, Bloom's:
Understand AACSB: pn
Reflective Thinking pn pn pn
AICPA: BB Critical Thinking pn pn
5) Financing activities are transactions involving external sources of funding.
pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy
pn pn
Topic: Measuring Business Activities pn pn
Learning Objective: 01-
pn
02 Understand the business activities that financial accounting measures. Bloom's:
pn pn pn pn pn pn pn pn pn Remember
AACSB:
Reflective Thinking pn pn
AICPA: FN Measurement pn
6) Investing activities include the purchase and sale of long-term resources.
pn pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy
pn pn
Topic: Measuring Business Activities pn pn
Learning Objective: 01-
pn
02 Understand the business activities that financial accounting measures. Bloom's:
pn pn pn pn pn pn pn pn pn Remember
AACSB:
Reflective Thinking pn pn
AICPA: FN Measurement pn
7) Operating activities include transactions that relate to the primary operations of the company.
pn pn pn pn pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy
pn pn
Topic: Measuring Business Activities pn pn
Learning Objective: 01-
pn
02 Understand the business activities that financial accounting measures. Bloom's:
pn pn pn pn pn pn pn pn pn Remember
AACSB:
Reflective Thinking pn pn
AICPA: FN Measurement pn
8) A corporation is an entity that is legally separate from its owners.
pn pn pn pn pn pn pn pn pn pn pn
Answer: TRUE Dif p n pn
ficulty: 1 Easy
pn pn
Topic: Measuring Business Activities pn pn
Learning Objective: 01-
pn
02 Understand the business activities that financial accounting measures. Bloom's:
pn pn pn pn pn pn pn pn pn Remember
AACSB:
Reflective Thinking pn pn
AICPA: BB Critical Thinking pn pn
