TEST BANK FOR FINANCIAL ACCOUNTING, 16TH EDITION, CARL WARREN, CHRISTINE JONICK, JENNIFER SCHNEIDER COMPLETE ALL CHAPTERS

TEST BANK FOR FINANCIAL ACCOUNTING, 16TH EDITION, CARL WARREN, CHRISTINE JONICK, JENNIFER SCHNEIDER. A merchandising business buys products from other businesses to sell to customers. a. True b. False ANSWER: True 2. The role of accounting is to provide many different users with financial information to make economic decisions. a. True b. False ANSWER: True 3. Accounting information users need reports about the economic activities and condition of businesses. a. True b. False ANSWER: True 4. Managerial accounting information is used by external and internal users equally. a. True b. False ANSWER: False 5. Senior executives cannot be criminally prosecuted for the wrongdoings they commit on behalf of the companies where they work. a. True b. False ANSWER: False 6. Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management. a. True b. False ANSWER: True 7. Proper ethical conduct implies that you only consider what's in your best interest. a. True b. False ANSWER: False 8. Some of the major fraudulent acts committed by senior executives started as what they considered to be small ethical lapses that grew out of control. a. True b. False ANSWER: True 9. A business is an organization in which basic resources or inputs, such as materials and labor, are assembled and processed to provide outputs in the form of goods or services to customers. a. True b. False ANSWER: True 10. Two factors that typically lead to ethical violations are relevance and timeliness of accounting information. a. True b. False ANSWER: False 11. Financial accounting reports are relevant only to users within the business. a. True b. False ANSWER: False 12. The Sarbanes-Oxley Act established standards for corporate responsibility and disclosure. a. True b. False ANSWER: True 13. The main objective for all business is to maximize unrealized profits. a. True b. False ANSWER: False 14. The primary role of accounting is to determine the amount of taxes a business will be required to pay to taxing entities. a. True b. False ANSWER: False 15. The basic difference between manufacturing and merchandising companies is the completion level of the products they purchase for resale to customers. a. True b. False ANSWER: True 16. An example of an external user of accounting information is the federal government. a. True b. False ANSWER: True 17. Proprietorships are owned by one owner and provide only services to their customers. a. True b. False ANSWER: False 18. About 90% of the businesses in the United States are organized as corporations. a. True b. False ANSWER: False 19. The Financial Accounting Standards Board (FASB) is the authoritative body that has primary responsibility for developing accounting principles. a. True b. False ANSWER: True 20. The cost concept is the basis for entering the purchase price into the accounting records. a. True b. False ANSWER: True 21. The unit of measurement concept requires that economic data be recorded in dollars. a. True b. False ANSWER: True 22. If a building is appraised for $85,000, it is offered for sale at $90,000, and the buyer pays $80,000 cash for it, the buyer would record the building at $85,000. a. True b. False ANSWER: False 23. The financial statements of a proprietorship should include the owner's personal assets and liabilities. a. True b. False ANSWER: False 24. No significant differences exist between the accounting standards issued by the FASB and the IASB. a. True b. False ANSWER: False 25. Generally accepted accounting principles regulate how and what financial information is reported by businesses. a. True b. False ANSWER: True 26. The IASB maintains an electronic database, called the Accounting Standards Codification, which contains all of the accounting standards that make up GAAP. a. True b. False ANSWER: False 27. The accounting equation can be expressed as Assets – Liabilities = Owner's Equity. a. True b. False ANSWER: True 28. The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of owners. a. True b. False ANSWER: True 29. The owner’s rights to the assets rank ahead of the creditors' rights to the assets. a. True b. False ANSWER: False 30. If the liabilities owed by a business total $300,000 and owner's equity is equal to $300,000, then the assets also total $300,000. a. True b. False ANSWER: False 31. If total assets decreased by $30,000 during a specific period and owner's equity decreased by $35,000 during the same period, the period's change in total liabilities was a $65,000 increase. a. True b. False ANSWER: False 32. If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total owner's equity was a $200,000 increase. a. True b. False ANSWER: True 33. If net income for a proprietorship was $50,000, the owner withdrew $20,000 in cash, and the owner invested $10,000 in cash, the capital of the owner increased by $40,000. a. True b. False ANSWER: True 34. An account receivable is typically classified as a revenue. a. True b. False ANSWER: False 35. An account receivable is a claim against a customer resulting from a sale on account. a. True b. False ANSWER: True 36. Paying an account payable increases liabilities and decreases assets. a. True b. False ANSWER: False 37. Receiving payments on an account receivable increases both equity and assets. a. True b. False ANSWER: False 38. Cash withdrawals by owners decrease assets and increase equity. a. True b. False ANSWER: False 39. Purchasing supplies on account increases liabilities and decreases equity. a. True b. False ANSWER: False 40. Receiving a bill or otherwise being notified that an amount is owed is not recorded until the amount is paid. a. True b. False ANSWER: False 41. Revenue is earned only when money is received. a. True b. False ANSWER: False 42. Assets that are used up during the process of earning revenue are called expenses. a. True b. False ANSWER: True 43. The excess of revenue over the expenses incurred in earning the revenue is called capital. a. True b. False