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Test Bank For
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Financial and Managerial Accounting, 9th Edition By John Wild
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Chapter 1-24 Answers are at the End of Each Chapter
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Chapter 01:
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Student name:__________
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Accounting is an information and measurement system that identifies, records, and
communicates an organization's business activities.
⊚ true
⊚ false
2) Accounting includes the analysis and interpretation of information.
⊚ true
⊚ false
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3) Financial accounting focuses on the needs of external users, who get accounting information
from general-purpose financial statements.
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⊚ true
⊚ false
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4) Internal users of accounting information do not directly manage the organization and have
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limited access to its accounting information.
⊚ true
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⊚ false
5) Auditors verify the effectiveness of internal controls.
⊚ true
⊚ false
6) External auditors examine financial statements to verify that they are prepared according to
generally accepted accounting principles.
⊚ true
⊚ false
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7) External users include lenders, shareholders, customers, and regulators.
⊚ true
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⊚ false
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8) Internal users include lenders, shareholders, brokers and nonexecutive employees.
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⊚ true
⊚ false
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9) Opportunities in accounting include auditing, consulting, market research, and tax planning.
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⊚ true
⊚ false
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10) The fraud triangle shows that three factors that push a person to commit fraud are
opportunity, pressure, and rationalization.
⊚ true
⊚ false
11) Internal controls are procedures to protect assets, ensure reliable accounting, promote
efficiency, and uphold company policies.
⊚ true
⊚ false
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12) A partnership is a business owned by two or more people.
⊚ true
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⊚ false
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13) Owners of a corporation are called shareholders or stockholders.
⊚ true
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⊚ false
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14) In a partnership, the owners are called stockholders.
⊚ true
⊚ false
15) The balance sheet shows a company's net income or loss over a period of time.
⊚ true
⊚ false
16) The Financial Accounting Standards Board (FASB) is given the task of setting generally
accepted accounting principles (GAAP) from the Securities and Exchange Commission.
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⊚ true
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⊚ false
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17) The business entity assumption means that accounting information presumes that the
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business will continue operating instead of being closed or sold.
⊚ true
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⊚ false
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18) GAAP wants information to have relevance and faithful representation.
⊚ true
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⊚ false
19) The business entity assumption means that a business is accounted for separately from other
business entities and its owner(s).
⊚ true
⊚ false
20) Revenues should not be recognized in the accounting records when earned, but rather when
cash is received.
⊚ true
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⊚ false
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21) Specific accounting principles are basic assumptions, concepts, and guidelines for preparing
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financial statements and arise out of long-used accounting practice.
⊚ true
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⊚ false
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22) A sole proprietorship is a business with multiple owners.
⊚ true
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⊚ false
23) Unlimited liability and separate taxation of the business are advantages of a sole
proprietorship.
⊚ true
⊚ false
24) Objectives, qualitative characteristics, elements, and recognition and measurement are
components of the FASB conceptual framework.
⊚ true
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⊚ false
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25) Objectivity means that information is supported by independent, unbiased evidence.
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⊚ true
⊚ false
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26) The going-concern assumption presumes that a business will continue operating instead of
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being closed or sold.
⊚ true
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⊚ false
27) The measurement principle prescribes that accounting information is based on subjective
opinion rather than cost.
⊚ true
⊚ false
28) The monetary unit assumption means that companies should express transactions and events
in terms such as “a lot” or “very little”.
⊚ true
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⊚ false
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29) The International Accounting Standards Board (IASB) issues International Financial
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Reporting Standards (IFRS) that identify preferred accounting practices.
⊚ true
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⊚ false
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30) A limited liability company (LLC) offers the limited liability of a partnership or
proprietorship and the tax treatment of a corporation.
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⊚ true
⊚ false
31) A limited liability company (LLC) offers the limited liability of a corporation and the tax
treatment of a partnership or proprietorship.
⊚ true
⊚ false
32) The Securities and Exchange Commission (SEC) is a U.S. government agency that oversees
proper use of GAAP by companies that sell stock and debt to the public.
C
⊚ true
on
⊚ false
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Test Bank For
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Financial and Managerial Accounting, 9th Edition By John Wild
en
en
Chapter 1-24 Answers are at the End of Each Chapter
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tia
Chapter 01:
l
l
Student name:__________
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Accounting is an information and measurement system that identifies, records, and
communicates an organization's business activities.
⊚ true
⊚ false
2) Accounting includes the analysis and interpretation of information.
⊚ true
⊚ false
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on
3) Financial accounting focuses on the needs of external users, who get accounting information
from general-purpose financial statements.
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⊚ true
⊚ false
en
4) Internal users of accounting information do not directly manage the organization and have
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limited access to its accounting information.
⊚ true
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⊚ false
5) Auditors verify the effectiveness of internal controls.
⊚ true
⊚ false
6) External auditors examine financial statements to verify that they are prepared according to
generally accepted accounting principles.
⊚ true
⊚ false
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on
7) External users include lenders, shareholders, customers, and regulators.
⊚ true
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⊚ false
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8) Internal users include lenders, shareholders, brokers and nonexecutive employees.
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⊚ true
⊚ false
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en
9) Opportunities in accounting include auditing, consulting, market research, and tax planning.
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⊚ true
⊚ false
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10) The fraud triangle shows that three factors that push a person to commit fraud are
opportunity, pressure, and rationalization.
⊚ true
⊚ false
11) Internal controls are procedures to protect assets, ensure reliable accounting, promote
efficiency, and uphold company policies.
⊚ true
⊚ false
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on
12) A partnership is a business owned by two or more people.
⊚ true
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⊚ false
en
13) Owners of a corporation are called shareholders or stockholders.
⊚ true
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⊚ false
l
14) In a partnership, the owners are called stockholders.
⊚ true
⊚ false
15) The balance sheet shows a company's net income or loss over a period of time.
⊚ true
⊚ false
16) The Financial Accounting Standards Board (FASB) is given the task of setting generally
accepted accounting principles (GAAP) from the Securities and Exchange Commission.
C
⊚ true
on
⊚ false
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on
17) The business entity assumption means that accounting information presumes that the
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business will continue operating instead of being closed or sold.
⊚ true
en
en
⊚ false
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18) GAAP wants information to have relevance and faithful representation.
⊚ true
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⊚ false
19) The business entity assumption means that a business is accounted for separately from other
business entities and its owner(s).
⊚ true
⊚ false
20) Revenues should not be recognized in the accounting records when earned, but rather when
cash is received.
⊚ true
C
⊚ false
on
21) Specific accounting principles are basic assumptions, concepts, and guidelines for preparing
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financial statements and arise out of long-used accounting practice.
⊚ true
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⊚ false
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22) A sole proprietorship is a business with multiple owners.
⊚ true
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⊚ false
23) Unlimited liability and separate taxation of the business are advantages of a sole
proprietorship.
⊚ true
⊚ false
24) Objectives, qualitative characteristics, elements, and recognition and measurement are
components of the FASB conceptual framework.
⊚ true
C
⊚ false
on
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25) Objectivity means that information is supported by independent, unbiased evidence.
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⊚ true
⊚ false
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en
26) The going-concern assumption presumes that a business will continue operating instead of
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being closed or sold.
⊚ true
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⊚ false
27) The measurement principle prescribes that accounting information is based on subjective
opinion rather than cost.
⊚ true
⊚ false
28) The monetary unit assumption means that companies should express transactions and events
in terms such as “a lot” or “very little”.
⊚ true
C
⊚ false
on
29) The International Accounting Standards Board (IASB) issues International Financial
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Reporting Standards (IFRS) that identify preferred accounting practices.
⊚ true
en
⊚ false
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30) A limited liability company (LLC) offers the limited liability of a partnership or
proprietorship and the tax treatment of a corporation.
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⊚ true
⊚ false
31) A limited liability company (LLC) offers the limited liability of a corporation and the tax
treatment of a partnership or proprietorship.
⊚ true
⊚ false
32) The Securities and Exchange Commission (SEC) is a U.S. government agency that oversees
proper use of GAAP by companies that sell stock and debt to the public.
C
⊚ true
on
⊚ false
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