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Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herrm
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ann
Chapter 1 cn A Framework for Financial Accounting
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1) Accounting is a system of maintaining records of a company's operations and communicating t
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hat information to decision makers.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy cn cn
Topic: Defining Accounting cn
Learning Objective: 01- cn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking cn cn
AICPA: BB Critical Thinking cn cn
2) Accounting information is used by investors to decide whether to invest in a company's stock.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy cn cn
Topic: Defining Accounting cn
Learning Objective: 01- cn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking cn cn
AICPA: BB Critical Thinking cn cn
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
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Answer: FALSE c n c n
Explanation:
Creditors lend money to a company. cn cn cn cn cn cn
Difficulty: 1 Easy cn cn
Topic: Defining Accounting cn
Learning Objective: 01- cn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking cn cn
AICPA: BB Critical Thinking cn cn
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.
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Answer: FALSE c n c n
Explanation:
Financial accounting primarily serves to provide information to external parties. cn cn cn cn cn cn cn cn cn cn
Difficulty: 2 Medium cn cn
Topic: Defining Accounting cn
,Learning Objective:
cn 01-01 Describe the two primary functions of financial accounting.
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, Bloom's:
Understand AACSB: cn
Reflective Thinking cn cn cn
AICPA: BB Critical Thinking cn cn
5) Financing activities are transactions involving external sources of funding.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy
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Topic: Measuring Business Activities cn cn
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 cn cn
AICPA: FN Measurement cn
6) Investing activities include the purchase and sale of long-term resources.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy
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Topic: Measuring Business Activities cn cn
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 cn cn
AICPA: FN Measurement cn
7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy
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Topic: Measuring Business Activities cn cn
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 cn cn
AICPA: FN Measurement cn
8) A corporation is an entity that is legally separate from its owners.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy
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Topic: Measuring Business Activities cn cn
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
cn cn cn cn cn cn cn cn cn Remember
AACSB:
Reflective Thinking cn cn
AICPA: BB Critical Thinking cn cn
Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herrm
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ann
Chapter 1 cn A Framework for Financial Accounting
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1) Accounting is a system of maintaining records of a company's operations and communicating t
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hat information to decision makers.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy cn cn
Topic: Defining Accounting cn
Learning Objective: 01- cn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking cn cn
AICPA: BB Critical Thinking cn cn
2) Accounting information is used by investors to decide whether to invest in a company's stock.
cn cn cn cn cn cn cn cn cn cn cn cn cn cn
Answer: TRUE Dif c n cn
ficulty: 1 Easy cn cn
Topic: Defining Accounting cn
Learning Objective: 01- cn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking cn cn
AICPA: BB Critical Thinking cn cn
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
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Answer: FALSE c n c n
Explanation:
Creditors lend money to a company. cn cn cn cn cn cn
Difficulty: 1 Easy cn cn
Topic: Defining Accounting cn
Learning Objective: 01- cn
01 Describe the two primary functions of financial accounting. Bloom's: Remember
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AACSB:
Reflective Thinking cn cn
AICPA: BB Critical Thinking cn cn
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.
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Answer: FALSE c n c n
Explanation:
Financial accounting primarily serves to provide information to external parties. cn cn cn cn cn cn cn cn cn cn
Difficulty: 2 Medium cn cn
Topic: Defining Accounting cn
,Learning Objective:
cn 01-01 Describe the two primary functions of financial accounting.
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, Bloom's:
Understand AACSB: cn
Reflective Thinking cn cn cn
AICPA: BB Critical Thinking cn cn
5) Financing activities are transactions involving external sources of funding.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy
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Topic: Measuring Business Activities cn cn
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
cn cn cn cn cn cn cn cn cn Remember
AACSB:
Reflective Thinking cn cn
AICPA: FN Measurement cn
6) Investing activities include the purchase and sale of long-term resources.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy
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Topic: Measuring Business Activities cn cn
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
cn cn cn cn cn cn cn cn cn Remember
AACSB:
Reflective Thinking cn cn
AICPA: FN Measurement cn
7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy
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Topic: Measuring Business Activities cn cn
Learning Objective: 01-
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02 Understand the business activities that financial accounting measures. Bloom's:
cn cn cn cn cn cn cn cn cn Remember
AACSB:
Reflective Thinking cn cn
AICPA: FN Measurement cn
8) A corporation is an entity that is legally separate from its owners.
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Answer: TRUE Dif c n cn
ficulty: 1 Easy
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Topic: Measuring Business Activities cn cn
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 cn cn
AICPA: BB Critical Thinking cn cn
