Test Bank and Solutions For Fundamental Accounting Principles Vol 1, 16th Edition 16e By Larson UPDATE 2023/2024

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Test Bank and Solutions For Fundamental
AccountingPrinciples Vol 1, 16th Edition 16e By
Larson
Accounting & Finance (New York University)



True / False Questions


1. Accounting is an information system that identifies, measures, records and communicates
relevant information that objectively and correctly represents an organization's economic
activities.
TRUE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-02 Power of Accounting



2. Accounting information helps people make better decisions about the performance of a
business.
TRUE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-02 Power of Accounting



3. The main objective of accounting is to help people to invest in new products and
businesses.
FALSE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-07 External Information Users

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4. Recordkeeping" is another term for "accounting".
FALSE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations




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8. In the partnership form of business, the owners of a business are called shareholders.
FALSE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations



9. Unlimited liability is an advantage for both a proprietorship and a partnership.
FALSE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations



10. Although a proprietorship is not a separate legal entity, a partnership is.
FALSE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations



11. A corporation is responsible for its actions and any debts incurred. It can enter into its own
contracts, and it can buy, own, and sell property.
TRUE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations




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12. Non-business organizations often operate educational and religious services for profit.
FALSE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-04 Forms of Organization



13. Sole proprietorships and partnerships are not subject to income tax in Canada.
TRUE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-12 Taxation



14. External users include lenders such as banks, and other creditors such as suppliers and
bondholders.
TRUE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-03 Identify users and uses of, and opportunities in, accounting.
Topic: 01-07 External Information Users



15. Internal users include creditors, shareholders, internal auditors and managers.
FALSE


Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-03 Identify users and uses of, and opportunities in, accounting.
Topic: 01-08 Internal Information Users




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