,TEST BANK FOR B! B!
Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herr
B! B! B! B! B! B! B! B! B! B!
mann
Chapter 1 B! A Framework for Financial Accounting
B! B! B! B!
1) Accounting is a system of maintaining records of a company's operations and communicati
B! B! B! B! B! B! B! B! B! B! B! B!
ng that information to decision makers.
B! B! B! B! B!
Answer: TRUE Dif
B ! B!
ficulty: 1 Easy
B! B!
Topic: Defining Accounting B!
Learning Objective: 01-
B!
01 Describe the two primary functions of financial accounting. Bloom's:
B! B! B! B! B! B! B! B! B!
Remember
AACSB:
Reflective Thinking B! B!
AICPA:
BB Critical Thinkin B! B!
g
2) Accounting information is used by investors to decide whether to invest in a company's stock.
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
Answer: TRUE Dif
B ! B!
ficulty: 1 Easy
B! B!
Topic: Defining Accounting B!
Learning Objective: 01-
B!
01 Describe the two primary functions of financial accounting. Bloom's:
B! B! B! B! B! B! B! B! B!
Remember
AACSB:
Reflective Thinking B! B!
AICPA:
BB Critical Thinkin B! B!
g
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
Answer: FALSE B ! B !
Explanation:
Creditors lend money to a company. B! B! B! B! B!
Difficulty: 1 Easy
B! B! B!
Topic: Defining Accounting B!
Learning Objective: 01-
B!
01 Describe the two primary functions of financial accounting. Bloom's:
B! B! B! B! B! B! B! B! B!
Remember
AACSB:
Reflective Thinking B! B!
AICPA:
BB Critical Thinkin B! B!
g
,4) The primary functions of financial accounting are to measure business activities of a compa
B! B! B! B! B! B! B! B! B! B! B! B! B!
ny and to communicate those measurements to internal parties for decision-making purposes.
B! B! B! B! B! B! B! B! B! B! B!
Answer: FALSE B ! B !
Explanation:
Financial accounting primarily serves to provide information to external partie
B! B! B! B! B! B! B! B! B!
s. Difficulty: 2 Medium
B! B! B!
Topic: Defining Accounting B!
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
B! B! B! B! B! B! B! B! B!
, Bloom's:
Understand AACSB: B!
Reflective Thinking
B
! B! B!
AICPA:
BB Critical Thinkin
B! B!
g
5) Financing activities are transactions involving external sources of funding.
B! B! B! B! B! B! B! B!
Answer: TRUE Dif B ! B!
ficulty: 1 Easy
B! B!
Topic: Measuring Business Activities B! B!
Learning Objective: 01-
B!
02 Understand the business activities that financial accounting measures. Bloom's:
B! B! B! B! B! B! B! B! B! Remember
AACSB:
Reflective Thinking B! B!
AICPA: FN Measurement B!
6) Investing activities include the purchase and sale of long-term resources.
B! B! B! B! B! B! B! B! B!
Answer: TRUE Dif B ! B!
ficulty: 1 Easy
B! B!
Topic: Measuring Business Activities B! B!
Learning Objective: 01-
B!
02 Understand the business activities that financial accounting measures. Bloom's:
B! B! B! B! B! B! B! B! B! Remember
AACSB:
Reflective Thinking B! B!
AICPA: FN Measurement B!
7) Operating activities include transactions that relate to the primary operations of the company.
B! B! B! B! B! B! B! B! B! B! B! B!
Answer: TRUE Dif B ! B!
ficulty: 1 Easy
B! B!
Topic: Measuring Business Activities B! B!
Learning Objective: 01-
B!
02 Understand the business activities that financial accounting measures. Bloom's:
B! B! B! B! B! B! B! B! B! Remember
AACSB:
Reflective Thinking B! B!
AICPA: FN Measurement B!
8) A corporation is an entity that is legally separate from its owners.
B! B! B! B! B! B! B! B! B! B! B!
Answer: TRUE Dif B ! B!
ficulty: 1 Easy
B! B!
Topic: Measuring Business Activities B! B!
Learning Objective: 01-
B!
02 Understand the business activities that financial accounting measures. Bloom's:
B! B! B! B! B! B! B! B! B! Remember
AACSB:
Reflective Thinking B! B!
AICPA:
Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herr
B! B! B! B! B! B! B! B! B! B!
mann
Chapter 1 B! A Framework for Financial Accounting
B! B! B! B!
1) Accounting is a system of maintaining records of a company's operations and communicati
B! B! B! B! B! B! B! B! B! B! B! B!
ng that information to decision makers.
B! B! B! B! B!
Answer: TRUE Dif
B ! B!
ficulty: 1 Easy
B! B!
Topic: Defining Accounting B!
Learning Objective: 01-
B!
01 Describe the two primary functions of financial accounting. Bloom's:
B! B! B! B! B! B! B! B! B!
Remember
AACSB:
Reflective Thinking B! B!
AICPA:
BB Critical Thinkin B! B!
g
2) Accounting information is used by investors to decide whether to invest in a company's stock.
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
Answer: TRUE Dif
B ! B!
ficulty: 1 Easy
B! B!
Topic: Defining Accounting B!
Learning Objective: 01-
B!
01 Describe the two primary functions of financial accounting. Bloom's:
B! B! B! B! B! B! B! B! B!
Remember
AACSB:
Reflective Thinking B! B!
AICPA:
BB Critical Thinkin B! B!
g
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
Answer: FALSE B ! B !
Explanation:
Creditors lend money to a company. B! B! B! B! B!
Difficulty: 1 Easy
B! B! B!
Topic: Defining Accounting B!
Learning Objective: 01-
B!
01 Describe the two primary functions of financial accounting. Bloom's:
B! B! B! B! B! B! B! B! B!
Remember
AACSB:
Reflective Thinking B! B!
AICPA:
BB Critical Thinkin B! B!
g
,4) The primary functions of financial accounting are to measure business activities of a compa
B! B! B! B! B! B! B! B! B! B! B! B! B!
ny and to communicate those measurements to internal parties for decision-making purposes.
B! B! B! B! B! B! B! B! B! B! B!
Answer: FALSE B ! B !
Explanation:
Financial accounting primarily serves to provide information to external partie
B! B! B! B! B! B! B! B! B!
s. Difficulty: 2 Medium
B! B! B!
Topic: Defining Accounting B!
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
B! B! B! B! B! B! B! B! B!
, Bloom's:
Understand AACSB: B!
Reflective Thinking
B
! B! B!
AICPA:
BB Critical Thinkin
B! B!
g
5) Financing activities are transactions involving external sources of funding.
B! B! B! B! B! B! B! B!
Answer: TRUE Dif B ! B!
ficulty: 1 Easy
B! B!
Topic: Measuring Business Activities B! B!
Learning Objective: 01-
B!
02 Understand the business activities that financial accounting measures. Bloom's:
B! B! B! B! B! B! B! B! B! Remember
AACSB:
Reflective Thinking B! B!
AICPA: FN Measurement B!
6) Investing activities include the purchase and sale of long-term resources.
B! B! B! B! B! B! B! B! B!
Answer: TRUE Dif B ! B!
ficulty: 1 Easy
B! B!
Topic: Measuring Business Activities B! B!
Learning Objective: 01-
B!
02 Understand the business activities that financial accounting measures. Bloom's:
B! B! B! B! B! B! B! B! B! Remember
AACSB:
Reflective Thinking B! B!
AICPA: FN Measurement B!
7) Operating activities include transactions that relate to the primary operations of the company.
B! B! B! B! B! B! B! B! B! B! B! B!
Answer: TRUE Dif B ! B!
ficulty: 1 Easy
B! B!
Topic: Measuring Business Activities B! B!
Learning Objective: 01-
B!
02 Understand the business activities that financial accounting measures. Bloom's:
B! B! B! B! B! B! B! B! B! Remember
AACSB:
Reflective Thinking B! B!
AICPA: FN Measurement B!
8) A corporation is an entity that is legally separate from its owners.
B! B! B! B! B! B! B! B! B! B! B!
Answer: TRUE Dif B ! B!
ficulty: 1 Easy
B! B!
Topic: Measuring Business Activities B! B!
Learning Objective: 01-
B!
02 Understand the business activities that financial accounting measures. Bloom's:
B! B! B! B! B! B! B! B! B! Remember
AACSB:
Reflective Thinking B! B!
AICPA:
