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