TEST BANK For Financial Accounting, 6th Edition By David Spiceland, Wayne Thomas, Verified Chapters 1 - 12, Complete Newest Version

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Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don He
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Chapter 1 nw A Framework for Financial Accounting
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1) Accounting is a system of maintaining records of a company's operations and communica
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ting that information to decision makers.
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Answer: TRUE Di n w nw


fficulty: 1 Easy
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Topic: Defining Accounting nw


Learning Objective: 01-
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01 Describe the two primary functions of financial accounting. Bloom's:
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Remember
AACSB:
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2) Accounting information is used by investors to decide whether to invest in a company's stock.
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Answer: TRUE Di n w nw


fficulty: 1 Easy
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Topic: Defining Accounting nw


Learning Objective: 01-
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01 Describe the two primary functions of financial accounting. Bloom's:
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Remember
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3) Accounting information is used by creditors to decide whether to invest in a company's stock.
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Answer: FALSE n w n w


Explanation:
Creditors lend money to a compan nw nw nw nw nw


y. Difficulty: 1 Easy
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Topic: Defining Accounting nw


Learning Objective: 01-
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01 Describe the two primary functions of financial accounting. Bloom's:
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Remember
AACSB:
Reflective Thinking nw n


AICPA:
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BB Critical Thinkin nw nw


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,4) The primary functions of financial accounting are to measure business activities of a com
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pany and to communicate those measurements to internal parties for decision-
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making purposes.
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Answer: FALSE n w n w


Explanation:
Financial accounting primarily serves to provide information to external parti
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es. Difficulty: 2 Medium
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Topic: Defining Accounting nw


Learning Objective: 01-01 Describe the two primary functions of financial accounting.
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, Bloom's:
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5) Financing activities are transactions involving external sources of funding.
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Answer: TRUE Din w nw


fficulty: 1 Easy
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Topic: Measuring Business Activities nw nw


Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
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AICPA: FN Measurement nw




6) Investing activities include the purchase and sale of long-term resources.
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Answer: TRUE Din w nw


fficulty: 1 Easy
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Topic: Measuring Business Activities nw nw


Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
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AICPA: FN Measurement nw




7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUE Din w nw


fficulty: 1 Easy
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Topic: Measuring Business Activities nw nw


Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
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AACSB:
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AICPA: FN Measurement nw




8) A corporation is an entity that is legally separate from its owners.
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Answer: TRUE Din w nw


fficulty: 1 Easy
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Topic: Measuring Business Activities nw nw


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 nw n


wAICPA: