Test Bank for Financial Accounting, 5th Edition by David Spiceland, Wayne Thomas, and Don Herrmann

TEST BANK
Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann

,TABLE OF CONTENTS

Chapter 1: A Framework for Financial Accounting

Chapter 2: The Accounting Cycle: During the Period

Chapter 3: The Accounting Cycle: End of the Period

Chapter 4: Cash and Internal Controls

Chapter 5: Receivables and Sales

Chapter 6: Inventory and Cost of Goods Sold

Chapter 7: Long-Term Assets

Chapter 8: Current Liabilities

Chapter 9: Long-Term Liabilities

Chapter 10: Stockholders’ Equity

Chapter 11: Statement of Cash Flows

Chapter 12: Financial Statement Analysis

,Chapter 1 A Framework for Financial Accounting

1) Accounting is a system of maintaining records of a company's operations and communicating
that information to decision makers.

Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking

2) Accounting information is used by investors to decide whether to invest in a company's stock.

Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking

3) Accounting information is used by creditors to decide whether to invest in a company's stock.

Answer: FALSE
Explanation: Creditors lend money to a company.
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking

4) The primary functions of financial accounting are to measure business activities of a company
and to communicate those measurements to internal parties for decision-making purposes.

Answer: FALSE
Explanation: Financial accounting primarily serves to provide information to external parties.
Difficulty: 2 Medium
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking

, 5) Financingbactivitiesbarebtransactionsbinvolvingbexternalbsourcesbofbfunding.

Answer:bTRUEbD
ifficulty:b1bEasy
Topic:b MeasuringbBusinessbActivities
LearningbObjective:b 01-02bUnderstandbthebbusinessbactivitiesbthatbfinancialbaccountingbmeasures.
Bloom's:b RememberbAACSB:b
ReflectivebThinkingbAICPA:b F
NbMeasurement

6) Investingbactivitiesbincludebthebpurchasebandbsalebofblong-termbresources.

Answer:bTRUEbD
ifficulty:b1bEasy
Topic:b MeasuringbBusinessbActivities
LearningbObjective:b 01-02bUnderstandbthebbusinessbactivitiesbthatbfinancialbaccountingbmeasures.
Bloom's:b RememberbAACSB:b
ReflectivebThinkingbAICPA:b F
NbMeasurement

7) Operatingbactivitiesbincludebtransactionsbthatbrelatebtobthebprimaryboperationsbofbthebcompany.

Answer:bTRUEbD
ifficulty:b1bEasy
Topic:b MeasuringbBusinessbActivities
LearningbObjective:b 01-02bUnderstandbthebbusinessbactivitiesbthatbfinancialbaccountingbmeasures.
Bloom's:b RememberbAACSB:b
ReflectivebThinkingbAICPA:b F
NbMeasurement

8) Abcorporationbisbanbentitybthatbisblegallybseparatebfrombitsbowners.

Answer:bTRUEbD
ifficulty:b1bEasy
Topic:b MeasuringbBusinessbActivities
LearningbObjective:b 01-02bUnderstandbthebbusinessbactivitiesbthatbfinancialbaccountingbmeasures.
Bloom's:bbbRememberbAACSB:b
ReflectivebThinkingbAICPA:b B
BbCriticalbThinking