,DOWNLOAD THE Test Bank for Financial Accounting 9th Edition Libby
c c c c c c c c c
Chapter 02 c c
Investing and Financing Decisions and the Accounting System
c c c c c c c
Truec/cFalsecQuestions
1. Thecprimarycobjectivecofcfinancialcreportingcisctocprovidecusefulcinformationctocexternalcdecisionc
makers.
True False
2. Incordercforcinformationctocbecrelevant,cthecinformationcneedsctocbeccomplete,cneutral,candcfreecfromc
error.
True False
3. Incordercforcinformationctocbecrelevant,cthecinformationcshouldchavecbothcpredictivecand/orcfeedbackc
value.
True False
4. Theccontinuitycassumptioncstatescthatcacbusinesscwillccontinuectocoperatecintocthecforeseeablecfuture.
True False
5. Theccurrentcassetscsectioncofcacbalancecsheetcincludescbothcinventorycandcprepaidcexpenses.
True False
2-1
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,DOWNLOAD THE Test Bank for Financial Accounting 9th Edition Libby
c c c c c c c c c
6. Thecstockholders'cequitycsectioncofcacbalancecsheetcincludesccapitalccontributedcbycownerscandcalsocr
etainedcearnings.
True False
7. Undercthecmonetarycunitcassumption,caccountingcinformationcshouldcbecmeasuredcandcreportedcinct
ermscofcthecnationalcmonetarycunit,cwithcancadjustmentcforcchangescincpurchasingcpower.
True False
8. Assetscarecreportedconcthecbalancecsheetcincthecordercofcliquidity.
True False
9. Manycvaluablecintangiblecassetscsuchcasctrademarkscandccopyrightscarecnotcreportedconcaccompany'sc
balancecsheet.
True False
10. Stockholders'cequitycreflectscthecfinancingcprovidedcbycowners.
True False
11. Commoncstockcandcadditional-paidcinccapitalcrepresentcthecfinancingcsourcescfromcshareholders.
True False
12. Financialcreportingcfocusesconcreportingcthecimpactcofctransactionsconcancentity'scfinancialcposition.
True False
13. Unearnedcrevenueciscreportedconcthecbalancecsheetcascacliabilitycandcrepresentscamountscpaidctocance
ntitycincexchangecforcfuturecservicescand/orcgoods.
True False
2-2
Copyrightc©c2017cMcGraw-HillcEducation.cAllcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
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, DOWNLOAD THE Test Bank for Financial Accounting 9th Edition Libby
c c c c c c c c c
14. Actransactioncmaycbecancexchangecofcassetscorcservicescbyconecbusinesscforcassets,cservices,corcp
romisesctocpaycfromcacdifferentcbusiness.
True False
15. Thecdualceffectscconceptcimpliescthatceveryctransactionchascatcleastctwoceffectsconcthecaccountingce
quation.
True False
16. Thecaccountingcequationcdoescnotchavectocbecincbalancecaftercthecrecordingcofceachctransaction.
True False
17. Additional-paidcinccapitalciscreportedconcthecbalancecsheetcascaccomponentcofcshareholders'cequity.
True False
18. Commoncstockcandcadditional-
paidcinccapitalcarecbothcreportedconcthecbalancecsheetcasccomponentscofcshareholders'cequity.
True False
19. Accompany'scassetscandcstockholders'cequitycbothcincreasecwhenctheccompanycsellscadditionalcsharesc
ofcstockcincexchangecforccash.
True False
20. Purchasingcsuppliescforccashcresultscincancincreasecinctotalcassetscforcthecpurchasingccompany.
True False
21. Thecnormalcbalancecforcancassetcaccountciscacdebitcandcthecnormalcbalancecforcacliabilitycaccountciscacc
redit.
True False
2-3
Copyrightc©c2017cMcGraw-HillcEducation.cAllcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
mynursytest.store
c c c c c c c c c
Chapter 02 c c
Investing and Financing Decisions and the Accounting System
c c c c c c c
Truec/cFalsecQuestions
1. Thecprimarycobjectivecofcfinancialcreportingcisctocprovidecusefulcinformationctocexternalcdecisionc
makers.
True False
2. Incordercforcinformationctocbecrelevant,cthecinformationcneedsctocbeccomplete,cneutral,candcfreecfromc
error.
True False
3. Incordercforcinformationctocbecrelevant,cthecinformationcshouldchavecbothcpredictivecand/orcfeedbackc
value.
True False
4. Theccontinuitycassumptioncstatescthatcacbusinesscwillccontinuectocoperatecintocthecforeseeablecfuture.
True False
5. Theccurrentcassetscsectioncofcacbalancecsheetcincludescbothcinventorycandcprepaidcexpenses.
True False
2-1
Copyrightc©c2017cMcGraw-HillcEducation.cAllcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
mynursytest.store
,DOWNLOAD THE Test Bank for Financial Accounting 9th Edition Libby
c c c c c c c c c
6. Thecstockholders'cequitycsectioncofcacbalancecsheetcincludesccapitalccontributedcbycownerscandcalsocr
etainedcearnings.
True False
7. Undercthecmonetarycunitcassumption,caccountingcinformationcshouldcbecmeasuredcandcreportedcinct
ermscofcthecnationalcmonetarycunit,cwithcancadjustmentcforcchangescincpurchasingcpower.
True False
8. Assetscarecreportedconcthecbalancecsheetcincthecordercofcliquidity.
True False
9. Manycvaluablecintangiblecassetscsuchcasctrademarkscandccopyrightscarecnotcreportedconcaccompany'sc
balancecsheet.
True False
10. Stockholders'cequitycreflectscthecfinancingcprovidedcbycowners.
True False
11. Commoncstockcandcadditional-paidcinccapitalcrepresentcthecfinancingcsourcescfromcshareholders.
True False
12. Financialcreportingcfocusesconcreportingcthecimpactcofctransactionsconcancentity'scfinancialcposition.
True False
13. Unearnedcrevenueciscreportedconcthecbalancecsheetcascacliabilitycandcrepresentscamountscpaidctocance
ntitycincexchangecforcfuturecservicescand/orcgoods.
True False
2-2
Copyrightc©c2017cMcGraw-HillcEducation.cAllcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Financial Accounting 9th Edition Libby
c c c c c c c c c
14. Actransactioncmaycbecancexchangecofcassetscorcservicescbyconecbusinesscforcassets,cservices,corcp
romisesctocpaycfromcacdifferentcbusiness.
True False
15. Thecdualceffectscconceptcimpliescthatceveryctransactionchascatcleastctwoceffectsconcthecaccountingce
quation.
True False
16. Thecaccountingcequationcdoescnotchavectocbecincbalancecaftercthecrecordingcofceachctransaction.
True False
17. Additional-paidcinccapitalciscreportedconcthecbalancecsheetcascaccomponentcofcshareholders'cequity.
True False
18. Commoncstockcandcadditional-
paidcinccapitalcarecbothcreportedconcthecbalancecsheetcasccomponentscofcshareholders'cequity.
True False
19. Accompany'scassetscandcstockholders'cequitycbothcincreasecwhenctheccompanycsellscadditionalcsharesc
ofcstockcincexchangecforccash.
True False
20. Purchasingcsuppliescforccashcresultscincancincreasecinctotalcassetscforcthecpurchasingccompany.
True False
21. Thecnormalcbalancecforcancassetcaccountciscacdebitcandcthecnormalcbalancecforcacliabilitycaccountciscacc
redit.
True False
2-3
Copyrightc©c2017cMcGraw-HillcEducation.cAllcrightscreserved.cNocreproductioncorcdistributioncwithoutcthecpriorcwrittencconsentcofcMcGraw-
HillcEducation.
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