Fundamentals of Financial Accounting, 8th Edition by Fred Phillips – Complete Chapters 1-3 with Answers

TEST BANK FOR
k k


Fundamentals of Financial Accounting, 8th Edition by Fred Phillips
k k k k k k k k




✅
Chapter 01 8e Phillips
k k k Answers Included
k


1) Creditorskarekownerskofkakcorporation.
⊚k true
⊚k false



2) Allkcorporationskacquirekfinancingkbykissuingkstockkonkpublickstockkexchanges.
⊚k true
⊚k false



3) Youkpaidk$10,000ktokbuyk1%kofkthekstockkinkakcorporationkthatkisknowkbankrupt.kThekcompanyko
wesk$10kmillionkdollarsktokitskcreditors.kAskakresultkofkthekbankruptcy,kyoukarekresponsiblekforkp
ayingk$100,000k(ork$10kmillionk×k1%)kofkthekamountkowedktokthekcreditors.
⊚k true
⊚k false



4) Cashkpaidkforkwageskiskankexamplekofkankoperatingkactivitykonkthekstatementkofkcashkflows.
⊚k true
⊚k false



5) Borrowingkmoneykfromkakbankkiskakfinancingkactivitykonkthekstatementkofkcashkflows.
⊚k true
⊚k false



6) Thekdailykbusinesskactivitieskinvolvedkinkrunningkakbusiness,ksuchkaskbuyingksupplieskandkp
ayingksalarieskandkwages,karekclassifiedkaskoperatingkactivitieskonkthekstatementkofkcashkflo
ws.
⊚k true
⊚k false



7) Stockholders'kequitykiskthekdifferencekbetweenkakcompany'skassetskandkitskliabilities.
⊚k true
⊚k false

,8) Akcompanykowesk$200,000konkakbankkloan.kItkwillkbekreportedkbykthekcompanykaskAccountskP
ayable.
⊚k true
⊚k false



9) Thekamountskreportedkonkfinancialkstatementskareksometimeskroundedktoktheknearestkthousandk
orkmillion.
⊚k true
⊚k false



10) AccountskPayable,kNoteskPayable,kandkSalarieskandkWageskPayablekarekexampleskofkl
iabilities.
⊚k true
⊚k false



11) Dividendskareksubtractedkfromkrevenueskonkthekincomekstatement.
⊚k true
⊚k false



12) Ifkakcompanykreportsknetkincomekonkthekincomekstatement,kthenkthekstatementkofkcashkflowsk
willkreportktheksamekamountkaskcashkflowskfromkoperatingkactivitieskforkthekperiod.
⊚k true
⊚k false



13) Revenuekiskreportedkonkthekincomekstatementkonlykifkcashkwaskreceivedkatkthekpointkofksale.
⊚k true
⊚k false



14) GenerallykAcceptedkAccountingkPrinciplesk(GAAP)krequirekprofitablekcompaniesktok
distributeksomekofktheirkearningsktoktheirkstockholders.
⊚k true
⊚k false

,15) CommonkStockkiskreportedkaskankassetkonkthekbalanceksheet.
⊚k true
⊚k false



16) Investorskarekmainlykinterestedkinkthekprofitabilitykofkakcompany.
⊚k true
⊚k false



17) Akstockkthatkdoesknotkpaykakdividendkiskankundesirablekinvestment.
⊚k true
⊚k false



18) Tokensurekthatkcompanieskproducekusefulkinformation,kitkmustkhavektwokfundamentalkc
haracteristics:kreliabilitykandkunderstandability.
⊚k true
⊚k false



19) ThekSecuritieskandkExchangekCommissionk(SEC)kiskthekgovernmentkagencykthatkhaskprimarykr
esponsibilitykforksettingkaccountingkstandardskinkthekU.S.
⊚k true
⊚k false



20) ThekSarbanes-
OxleykActk(SOX)krequiresktopkmanagementkofkcompaniesktoksignkakreportkcertifyingkthatkt
hekfinancialkstatementskarekfreekofkerror.
⊚k true
⊚k false



21) CompanieskmustkusekakDecemberk31stkyear-endkforkallkfinancialkstatements.
⊚k false

, ⊚k true




⊚k false