Test Bank for Survey of Accounting 10th Edition Carl Warren Complete Guide All Chapters Financial Accounting Principles and Practice Questions Workbook 2026/ 2027

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Test Bank For Survey Of Accounting 10th Edition Carl
Warren Complete Guide All Chapters Financial Accounting
Principles And Practice Questions Workbook 2026/ 2027




TEST BANK

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Chap 01 10e warren


Indicate whether the statement is true or f alse.
1. The popularity of the sole proprietorship is due to the ease and low cost of organizing.
a. True
b. False

Ans: true


2. A corporation is a business that is legally separate and distinct f rom its owners.
a. True
b. False

Ans: true

3. Merchandising businesses produce products rather than provide services to customers.
a. True
b. False

Ans: f alse

4. A partnership is owned by two or more individuals.
a. True
b. False

Ans: true

5. A limited liability company combines attributes of a partnership and a corporation.
a. True
b. False

Ans: true

6. The ownership of a proprietorship is divided into shares of stock owned by its stockholders’.
a. True
b. False

Ans: f alse

7. Accounting is often called the "language of business" because business inf ormation is communicated to
stakeholders.
a. True
b. False

Ans: true




Page 2

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Name: class: date:

Chap 01 10e warren

8. John deere is a leading manuf acturer of agricultural machinery in the world, producing products that serve
unique market needs. Theref ore, john deere is an example of a company that uses a premium-price approach
to attract customers.
a. True
b. False

Ans: true

9. Creditors have pref erence to assets behind stockholders’ if a business f ails.
a. True
b. False

Ans: f alse

10. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing
agreement.
a. True
b. False

Ans: true

11. The balance sheet represents the accounting equation.
a. True
b. False

Ans: true

12. A primary disadvantage of corporations is that the f inancial resources available to them are limited.
a. True
b. False

Ans: f alse

13. Assets are acquired through investing activities when resources are purchased.
a. True
b. False

Ans: true

14. The objective of most businesses is to maximize prof its.
a. True
b. False

Ans: true




Page 3

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Name: class: date:

Chap 01 10e warren

15. The stockholders’' equity of a company should equal the sum of its total assets and total liabilities.
a. True
b. False

Ans: f alse

16. The branch of accounting related to the management's f inancial decisions is known as f inancial accounting.
a. True
b. False

Ans: f alse

17. All merchandising businesses are organized as corporations.
a. True
b. False

Ans: f alse

18. Stockholders’ of a corporation are its internal stakeholders.
a. True
b. False

Ans: f alse

19. The basic type of stock issued to owners is called common stock.
a. True
b. False

Ans: true

20. A business stakeholder has an interest in the economic perf ormance of a company.
a. True
b. False

Ans: true

21. Manuf acturing businesses change basic inputs into products that are sold to individual customers.
a. True
b. False

Ans: true

22. Companies using a low-cost emphasis provide products and services that compete on f eatures other than price.
a. True
b. False

Ans: f alse

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