TEST BANK Financial Accounting, 6th Edition Chapters 1 – 12 Complete By David Spiceland, Wayne Thomas and Don Herrmann

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FinancialAccounting,6thEdition
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Chapters 1 – 12 Complete
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By David Spiceland, Wayne Thomas and Don Herrmann
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,TABLEOFCONTENTS v v v




Chapter1:A Framework for Financial Accounting Chapter 2:The
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Accounting Cycle: During thePeriod Chapter 3: The Accounting Cycle: End
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of the Period Chapter 4: Cash and Internal Controls
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Chapter 5: Receivables and Sales
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Chapter 6: Inventory and Cost of Goods Sold Chapter7:Long-TermAssets
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Chapter8: Current Liabilities Chapter9:Long-
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TermLiabilities Chapter10:Stockholders’Equity
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v Chapter 11: Statement of Cash Flows
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Chapter12:FinancialStatementAnalysis
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,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 communicating that
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information to decision makers.
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Answer: TRUEv




Difficulty:1Easy
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Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
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vRemember
AACSB: Reflective Thinking
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vAICPA: BB Critical 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: TRUEv




Difficulty:1Easy
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Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
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vRemember
AACSB: Reflective Thinking
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vAICPA: BB Critical 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 v




Explanation: Creditors lend money to a company. v v v v v v




Difficulty: 1 Easy
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Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
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vRemember
AACSB: Reflective Thinking
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vAICPA: BB Critical Thinking
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4) The primary functions of financial accounting are to measure business activities of a company and
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to communicate those measurements to internal partiesfor decision-making purposes.
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Answer: FALSE v




Explanation: Financial accounting primarily serves to provide information to external parties.
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vDifficulty: 2 Medium v v




Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
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vUnderstand
AACSB: Reflective Thinking
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vAICPA: BB Critical Thinking
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, 5) Financing activities are transactions involving external sources of funding.
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Answer: TRUE v




Difficulty:1Easy
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Topic: Measuring BusinessActivities
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Learning Objective: 01-02 Understand the business activities that financial accountingmeasures.
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vBloom's: Remember AACSB:
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ReflectiveThinkingAICPA: FN v v




Measurement
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6) Investing activities include the purchase and sale oflong-term resources.
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Answer: TRUE v




Difficulty:1Easy
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Topic: Measuring BusinessActivities
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Learning Objective: 01-02 Understand the business activities that financial accountingmeasures.
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vBloom's: Remember AACSB:
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ReflectiveThinkingAICPA: FN v v




Measurement
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7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUE v




Difficulty:1Easy
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Topic: Measuring BusinessActivities
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Learning Objective: 01-02 Understand the business activities that financial accountingmeasures.
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vBloom's: Remember AACSB:
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ReflectiveThinkingAICPA: FN v v




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




Difficulty:1Easy
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Topic: Measuring BusinessActivities
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Learning Objective: 01-02 Understand the business activities that financial accountingmeasures.
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vBloom's: Remember AACSB:
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Reflective ThinkingAICPA: BB v v




Critical Thinking
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