Test Bank Fundamentals of Financial Accounting (8th ED) by Fred Phillips, Patricia Libby, All Chapters , Latest Edition

Test Bank

Fundamentals Of Financial Accounting
By Fred Phillips, Patricia Libby



8th Edition




1

,Table Of Contents
Chapter 1: Business Decisions And Financial Accounting
Chapter 2: The Balance Sheet
Chapter 3: The Income Statement
Chapter 4: Adjustments, Financial Statements, And Financial Results
Chapter 5: Fraud, Internal Control, And Cash
Chapter 6: Merchandising Operations And The Multistep Income Statement
Chapter 7: Inventory And Cost Of Goods Sold
Chapter 8: Receivables, Bad Debt Expense, And Interest Revenue
Chapter 9: Long-Lived Tangible And Intangible Assets
Chapter 10: Liabilities
Chapter 11: Stockholders’ Equity
Chapter 12: Statement Cash Flows
Chapter 13: Measuring And Evaluating Financial Performance




2

,Test Bank Fundamentals Of Financial Accounting, 8th Edition By Fred Phillips



Chapter 01: Business Decisions Answers Included
And Financial Accounting

1) Creditors Are Owners Of A
Corporation.
⊚ True
⊚ False



2) All Corporations Acquire Financing By Issuing Stock On Public Stock Exchanges.
⊚ True
⊚ False



3) You Paid $10,000 To Buy 1% Of The Stock In A Corporation That Is Now Bankrupt. The
Company Owes $10 Million Dollars To Its Creditors. As A Result Of The Bankruptcy, You
Are Responsible For Paying $100,000 (Or $10 Million × 1%) Of The Amount Owed To The
Creditors.
⊚ True
⊚ False



4) Cash Paid For Wages Is An Example Of An Operating Activity On The Statement Of Cash Flows.
⊚ True
⊚ False



5) Borrowing Money From A Bank Is A Financing Activity On The Statement Of Cash Flows.
⊚ True
⊚ False



6) The Daily Business Activities Involved In Running A Business, Such As Buying
Supplies And Paying Salaries And Wages, Are Classified As Operating Activities On
The Statement Of Cash Flows.
⊚ True
⊚ False



7) Stockholders' Equity Is The Difference Between A Company's Assets And Its Liabilities.
⊚ True
⊚ False

3

, 8) A Company Owes $200,000 On A Bank Loan. It Will Be Reported By The Company As
Accounts Payable.
⊚ True
⊚ False



9) The Amounts Reported On Financial Statements Are Sometimes Rounded To The Nearest
Thousand Or Million.
⊚ True
⊚ False



10) Accounts Payable, Notes Payable, And Salaries And Wages Payable Are Examples
Of Liabilities.
⊚ True
⊚ False



11) Dividends Are Subtracted From Revenues On The Income Statement.
⊚ True
⊚ False



12) If A Company Reports Net Income On The Income Statement, Then The Statement Of
Cash Flows Will Report The Same Amount As Cash Flows From Operating Activities For
The Period.
⊚ True
⊚ False



13) Revenue Is Reported On The Income Statement Only If Cash Was Received At The Point Of Sale.
⊚ True
⊚ False



14) Generally Accepted Accounting Principles (GAAP) Require Profitable Companies
To Distribute Some Of Their Earnings To Their Stockholders.
⊚ True
⊚ False




4