Name: Class: Date:
TesT Bank For
Survey of Accounting 10th Edition by Carl Warren, Amanda Farmer, Jefferson P.
Jones Chapter 1-14 Answers are at the End of Each Chapter
chapter 1
Indicate whether the statement is true or false.
1. A business stakeholder has an interest in the economic performance of a company. a. True
b. False
2. The ownership of a proprietorship is divided into shares of stock owned by its stockholders. a. True
b. False
3. Creditors have preference to assets behind stockholders if a business fails. a. True
b. False
4. Manufacturing businesses change basic inputs into products that are sold to individual customers. a. True
b. False
5. The stockholders' equity of a company should equal the sum of its total assets and total liabilities. a. True
b. False
6. Assets are acquired through investing activities when resources are purchased. a. True
b. False
7. A primary disadvantage of corporations is that the financial resources available to them are limited. a. True
b. False
8. A limited liability company combines attributes of a partnership and a corporation. a. True
,Name: Class: Date:
b. False
9. John Deere is a leading manufacturer of agricultural machinery in the world, producing products that serve unique
market needs. Therefore, John Deere is an example of a company that uses a premium-price approach to attract
customers. a. True
b. False
10. A corporation is a business that is legally separate and distinct from its owners. a. True
b. False
11. The balance sheet represents the accounting equation.
a. True
b. False
12. The popularity of the sole proprietorship is due to the ease and low cost of organizing. a. True
b. False
13. Accounting is often called the "language of business" because business information is communicated to stakeholders.
a. True
b. False
14. The basic type of stock issued to owners is called common stock. a. True
b. False
15. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing agreement. a.
True
b. False
,Name: Class: Date:
16. All merchandising businesses are organized as corporations.
a. True
b. False
17. Stockholders of a corporation are its internal stakeholders.
a. True
b. False
18. A partnership is owned by two or more individuals.
a. True
b. False
19. The objective of most businesses is to maximize profits.
a. True
b. False
20. The branch of accounting related to the management's financial decisions is known as financial accounting.
a. True
b. False
21. Merchandising businesses produce products rather than provide services to customers. a. True
b. False
22. Companies using a low-cost emphasis provide products and services that compete on features other than price. a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
23. Under a _____, a business designs products that possess unique attributes or characteristics for which customers are
willing to pay more.
a. premium-price approach
b. outreach approach
, Name: Class: Date:
c. low-cost approach
d. customer approach
24. A financial statement that summarizes the cash receipts and cash payments of a company for a specific period of time
is _____.
a. the cash analysis statement
b. the bank reconciliation statement
c. the statement of cash flows
d. the statement of retained and nonretained cash earnings
25. Simmon's Inc., had the following account balances on June 30, 20Y9. What is Simmon's net income for the month of
June?
Accounts Payable $ 8,900
Common Stock 16,000
Cash 20,500
Equipment 19,000
Fees Earned 65,000
Miscellaneous Expense 18,500
Rent Expense 5,000
Retained Earnings 8,000
Wages Expense 17,500
a. $24,000
b. $41,000
c. $39,500
d. 65,000
26. The "rules" of accounting are referred to as _____.
a. income tax regulations
b. SEC regulations
c. internet rules
d. Generally Accepted Accounting Principles
27. Which of the following is not an example of a capital market stakeholder?
a. Banks
TesT Bank For
Survey of Accounting 10th Edition by Carl Warren, Amanda Farmer, Jefferson P.
Jones Chapter 1-14 Answers are at the End of Each Chapter
chapter 1
Indicate whether the statement is true or false.
1. A business stakeholder has an interest in the economic performance of a company. a. True
b. False
2. The ownership of a proprietorship is divided into shares of stock owned by its stockholders. a. True
b. False
3. Creditors have preference to assets behind stockholders if a business fails. a. True
b. False
4. Manufacturing businesses change basic inputs into products that are sold to individual customers. a. True
b. False
5. The stockholders' equity of a company should equal the sum of its total assets and total liabilities. a. True
b. False
6. Assets are acquired through investing activities when resources are purchased. a. True
b. False
7. A primary disadvantage of corporations is that the financial resources available to them are limited. a. True
b. False
8. A limited liability company combines attributes of a partnership and a corporation. a. True
,Name: Class: Date:
b. False
9. John Deere is a leading manufacturer of agricultural machinery in the world, producing products that serve unique
market needs. Therefore, John Deere is an example of a company that uses a premium-price approach to attract
customers. a. True
b. False
10. A corporation is a business that is legally separate and distinct from its owners. a. True
b. False
11. The balance sheet represents the accounting equation.
a. True
b. False
12. The popularity of the sole proprietorship is due to the ease and low cost of organizing. a. True
b. False
13. Accounting is often called the "language of business" because business information is communicated to stakeholders.
a. True
b. False
14. The basic type of stock issued to owners is called common stock. a. True
b. False
15. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing agreement. a.
True
b. False
,Name: Class: Date:
16. All merchandising businesses are organized as corporations.
a. True
b. False
17. Stockholders of a corporation are its internal stakeholders.
a. True
b. False
18. A partnership is owned by two or more individuals.
a. True
b. False
19. The objective of most businesses is to maximize profits.
a. True
b. False
20. The branch of accounting related to the management's financial decisions is known as financial accounting.
a. True
b. False
21. Merchandising businesses produce products rather than provide services to customers. a. True
b. False
22. Companies using a low-cost emphasis provide products and services that compete on features other than price. a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
23. Under a _____, a business designs products that possess unique attributes or characteristics for which customers are
willing to pay more.
a. premium-price approach
b. outreach approach
, Name: Class: Date:
c. low-cost approach
d. customer approach
24. A financial statement that summarizes the cash receipts and cash payments of a company for a specific period of time
is _____.
a. the cash analysis statement
b. the bank reconciliation statement
c. the statement of cash flows
d. the statement of retained and nonretained cash earnings
25. Simmon's Inc., had the following account balances on June 30, 20Y9. What is Simmon's net income for the month of
June?
Accounts Payable $ 8,900
Common Stock 16,000
Cash 20,500
Equipment 19,000
Fees Earned 65,000
Miscellaneous Expense 18,500
Rent Expense 5,000
Retained Earnings 8,000
Wages Expense 17,500
a. $24,000
b. $41,000
c. $39,500
d. 65,000
26. The "rules" of accounting are referred to as _____.
a. income tax regulations
b. SEC regulations
c. internet rules
d. Generally Accepted Accounting Principles
27. Which of the following is not an example of a capital market stakeholder?
a. Banks
