Survey of Accounting 11th Edition Test Bank | Carl Warren, Jefferson Jones & William B. Tayler | ISBN 9798214052854

SURVEY OF ACCOUNTING
11th Edition
Test Bank

Carl Warren
Jefferson Jones
William B. Tayler

ISBN: 9798214052854




Test Bank • 11th Edition • Complete Chapter Coverage

,TABLE OF CONTENTS

Chapter 1: The Role of Accounting in Business
Chapter 2: Service Operations: Cash Basis
Chapter 3: Service Operations: Accrual Basis
Chapter 4: Merchandising Operations
Chapter 5: Internal Control and Cash
Chapter 6: Receivables and Inventories
Chapter 7: Long-Term Operating Assets
Chapter 8: Liabilities and Stockholders’ Equity
Chapter 9: Manufacturing Operations
Chapter 10: Cost-Volume-Profit Analysis
Chapter 11: Planning Operations
Chapter 12: Operating Decisions
Chapter 13: Evaluating Segments and Capital Investments
Chapter 14: The Balanced Scorecard

CHAPTER NO. 1: THE ROLE OF ACCOUNTING IN BUSINESS
TRUE OR FALSE.
1. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing
agreement.
a. True
b. False

ANSWER: True

2. A business stakeholder has an interest in the economic performance of a company.
a. True
b. False

ANSWER: True
3. A primary disadvantage of corporations is that the financial resources available to them are limited.
a. True
b. False

ANSWER: False
4. Companies using a low-cost emphasis provide products and services that compete on features other than
price.
a. True
b. False

ANSWER: False
5. Accounting is often called the "language of business" because business information is

, communicated to stakeholders.
a. True
b. False

ANSWER: True
6. Merchandising businesses produce products rather than provide services to customers.
a. True
b. False

ANSWER: False
7. Manufacturing businesses change basic inputs into products that are sold to individual customers.
a. True
b. False

ANSWER: True
8. The popularity of the sole proprietorship is due to the ease and low cost of organizing.
a. True
b. False

ANSWER: True
9. Stockholders of a corporation are its internal stakeholders.
a. True
b. False

ANSWER: False
10. Creditors have preference to assets over stockholders if a business fails.
a. True
b. False

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

ANSWER: True
12. 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

, ANSWER: True
13. The ownership of a proprietorship is divided into shares of stock owned by its stockholders.
a. True
b. False

ANSWER: False
14. A limited liability company combines attributes of a partnership and a corporation.
a. True
b. False

ANSWER: True
15. All merchandising businesses are organized as corporations.
a. True
b. False

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

ANSWER: True
17. A partnership is owned by two or more individuals.
a. True
b. False

ANSWER: True
18. The branch of accounting related to the management's financial decisions is known as financial accounting.
a. True
b. False

ANSWER: False
19. The objective of most businesses is to maximize profits.
a. True
b. False

ANSWER: True
20. Assets are acquired through investing activities when resources are purchased.
a. True
b. False