Test Bank for Financial Accounting, 6th Edition – David Spiceland, Wayne M. Thomas & Don Herrmann | Latest 2025/2026 Update

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
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1) Accounting is a system of maintaining records of a company's operations and
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communicatingthat information to decision makers.
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Answer: TRUE
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Difficulty: 1 Easy
S S S


Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.
S S S S S S S S S S


Bloom's: Remember
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AACSB: Reflective Thinking
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AICPA: BB Critical
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Thinking
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2) Accounting information is used by investors to decide whether to invest in a company's stock.
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Answer: TRUE
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Difficulty: 1 Easy
S S S


Topic: Defining Accounting
S S


Learning Objective: 01-01 Describe the two primary functions of financial accounting.
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Bloom's: Remember
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AACSB: Reflective Thinking
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AICPA: BB Critical
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Thinking
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3) Accounting information is used by creditors to decide whether to invest in a company's stock.
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Answer: FALSE S


Explanation: Creditors lend money to a company.
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Difficulty: 1 Easy
S S S


Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.
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Bloom's: Remember
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AACSB: Reflective Thinking
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AICPA: BB Critical
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Thinking
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4) The primary functions of financial accounting are to measure business activities of a
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companyand to communicate those measurements to internal parties for decision-making
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purposes.
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Answer: FALSE S


Explanation: Financial accounting primarily serves to provide information to external parties.
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Difficulty: 2 Medium
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Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.
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Bloom's: Understand
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, AACSB: Reflective Thinking
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AICPA: BB Critical
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Thinking
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5) Financing activities are transactions involving external sources of funding.
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Answer: TRUES


Difficulty: 1 Easy
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Topic: Measuring Business Activities
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Learning Objective: 01-02 Understand the business activities that financial accounting
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measures.
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Bloom's: Remember
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AACSB: Reflective
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ThinkingAICPA: FN
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Measurement
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6) Investing activities include the purchase and sale of long-term resources.
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Answer: TRUES


Difficulty: 1 Easy
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Topic: Measuring Business Activities
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Learning Objective: 01-02 Understand the business activities that financial accounting
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measures.
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Bloom's: Remember
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AACSB: Reflective
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ThinkingAICPA: FN
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Measurement
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7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUES


Difficulty: 1 Easy
S S S


Topic: Measuring Business Activities
S S S


Learning Objective: 01-02 Understand the business activities that financial accounting
S S S S S S S S S


measures.
S


Bloom's: Remember
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AACSB: Reflective
S S


ThinkingAICPA: FN
S S S


Measurement
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8) A corporation is an entity that is legally separate from its owners.
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Answer: TRUES


Difficulty: 1 Easy
S S S


Topic: Measuring Business Activities
S S S


Learning Objective: 01-02 Understand the business activities that financial accounting
S S S S S S S S S


measures.
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Bloom's: Remember AACSB:
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Reflective ThinkingAICPA:
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