TEST BANK
Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann
,TABLE OF CONTENTS
Chapter 1: A Framework for Financial Accounting
Chapter 2: The Accounting Cycle: During the Period
Chapter 3: The Accounting Cycle: End of the Period
Chapter 4: Cash and Internal Controls
Chapter 5: Receivables and Sales
Chapter 6: Inventory and Cost of Goods Sold
Chapter 7: Long-Term Assets
Chapter 8: Current Liabilities
Chapter 9: Long-Term Liabilities
Chapter 10: Stockholders’ Equity
Chapter 11: Statement of Cash Flows
Chapter 12: Financial Statement Analysis
,Chapter 1 A Framework for Financial Accounting
1) Accounting is a system of maintaining records of a company's operations and communicating
that information to decision makers.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
2) Accounting information is used by investors to decide whether to invest in a company's stock.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
Answer: FALSE
Explanation: Creditors lend money to a company.
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
4) The dprimary dfunctions dof dfinancial daccounting dare dto dmeasure dbusiness dactivities dof da
dcompanydand dto dcommunicate dthose dmeasurements dto dinternal dparties dfor ddecision-making
dpurposes.
Answer: d FALSE
Explanation: dFinancial daccounting dprimarily dserves dto dprovide dinformation dto dexternal dparties.
dDifficulty: d2 dMedium
Topic: d Defining dAccounting
Learning dObjective: d 01-01 dDescribe dthe dtwo dprimary dfunctions dof dfinancial daccounting.
dBloom's: dUnderstand
AACSB: dReflective dThinking
dAICPA: d BB dCritical
dThinking
, 5) Financing dactivities dare dtransactions dinvolving dexternal dsources dof dfunding.
Answer: dTRUE
dDifficulty: d1
dEasy
Topic: d Measuring dBusiness dActivities
Learning dObjective: d 01-02 dUnderstand dthe dbusiness dactivities dthat dfinancial daccounting
dmeasures.
Bloom's: d Remember
dAACSB: d Reflective
dThinkingdAICPA: d FN
dMeasurement
6) Investing dactivities dinclude dthe dpurchase dand dsale dof dlong-term dresources.
Answer: dTRUE
dDifficulty: d1
dEasy
Topic: d Measuring dBusiness dActivities
Learning dObjective: d 01-02 dUnderstand dthe dbusiness dactivities dthat dfinancial daccounting
dmeasures.
Bloom's: d Remember
dAACSB: d Reflective
dThinkingdAICPA: d FN
dMeasurement
7) Operating dactivities dinclude dtransactions dthat drelate dto dthe dprimary doperations dof dthe
dcompany.
Answer: dTRUE
dDifficulty: d1
dEasy
Topic: d Measuring dBusiness dActivities
Learning dObjective: d 01-02 dUnderstand dthe dbusiness dactivities dthat dfinancial daccounting
dmeasures.
Bloom's: d Remember
dAACSB: d Reflective
dThinkingdAICPA: d FN
dMeasurement
8) A dcorporation dis dan dentity dthat dis dlegally dseparate dfrom dits downers.
Answer: dTRUE
dDifficulty: d1
dEasy
Topic: d Measuring dBusiness dActivities
Learning dObjective: d 01-02 dUnderstand dthe dbusiness dactivities dthat dfinancial daccounting
Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann
,TABLE OF CONTENTS
Chapter 1: A Framework for Financial Accounting
Chapter 2: The Accounting Cycle: During the Period
Chapter 3: The Accounting Cycle: End of the Period
Chapter 4: Cash and Internal Controls
Chapter 5: Receivables and Sales
Chapter 6: Inventory and Cost of Goods Sold
Chapter 7: Long-Term Assets
Chapter 8: Current Liabilities
Chapter 9: Long-Term Liabilities
Chapter 10: Stockholders’ Equity
Chapter 11: Statement of Cash Flows
Chapter 12: Financial Statement Analysis
,Chapter 1 A Framework for Financial Accounting
1) Accounting is a system of maintaining records of a company's operations and communicating
that information to decision makers.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
2) Accounting information is used by investors to decide whether to invest in a company's stock.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
Answer: FALSE
Explanation: Creditors lend money to a company.
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
4) The dprimary dfunctions dof dfinancial daccounting dare dto dmeasure dbusiness dactivities dof da
dcompanydand dto dcommunicate dthose dmeasurements dto dinternal dparties dfor ddecision-making
dpurposes.
Answer: d FALSE
Explanation: dFinancial daccounting dprimarily dserves dto dprovide dinformation dto dexternal dparties.
dDifficulty: d2 dMedium
Topic: d Defining dAccounting
Learning dObjective: d 01-01 dDescribe dthe dtwo dprimary dfunctions dof dfinancial daccounting.
dBloom's: dUnderstand
AACSB: dReflective dThinking
dAICPA: d BB dCritical
dThinking
, 5) Financing dactivities dare dtransactions dinvolving dexternal dsources dof dfunding.
Answer: dTRUE
dDifficulty: d1
dEasy
Topic: d Measuring dBusiness dActivities
Learning dObjective: d 01-02 dUnderstand dthe dbusiness dactivities dthat dfinancial daccounting
dmeasures.
Bloom's: d Remember
dAACSB: d Reflective
dThinkingdAICPA: d FN
dMeasurement
6) Investing dactivities dinclude dthe dpurchase dand dsale dof dlong-term dresources.
Answer: dTRUE
dDifficulty: d1
dEasy
Topic: d Measuring dBusiness dActivities
Learning dObjective: d 01-02 dUnderstand dthe dbusiness dactivities dthat dfinancial daccounting
dmeasures.
Bloom's: d Remember
dAACSB: d Reflective
dThinkingdAICPA: d FN
dMeasurement
7) Operating dactivities dinclude dtransactions dthat drelate dto dthe dprimary doperations dof dthe
dcompany.
Answer: dTRUE
dDifficulty: d1
dEasy
Topic: d Measuring dBusiness dActivities
Learning dObjective: d 01-02 dUnderstand dthe dbusiness dactivities dthat dfinancial daccounting
dmeasures.
Bloom's: d Remember
dAACSB: d Reflective
dThinkingdAICPA: d FN
dMeasurement
8) A dcorporation dis dan dentity dthat dis dlegally dseparate dfrom dits downers.
Answer: dTRUE
dDifficulty: d1
dEasy
Topic: d Measuring dBusiness dActivities
Learning dObjective: d 01-02 dUnderstand dthe dbusiness dactivities dthat dfinancial daccounting
