TEST BANK
All Chapters Included
,Financial Accounting, 13th Edition by C William Thomas and Wendy M. Tietz
Chapters 1 - 12
,Chapter 1
The Financial Statements
Ethics Check
(5-10 min.) EC 1-1
a. Objectivity and independence
b. Due care
c. Integrity
d. Integrity
Short Exercises
(10 min.) S 1-1
a. Corporation, limited partners of a Limited-
liability partnership (LLP) and Limited-liability
company (LLC). If any of these businesses fails and
cannot pay its liabilities, creditors cannot force the
owners to pay the business’s debts from the owners’
personal assets. Creditors can go after the general
partner of a limited liability partnership.
b. Proprietorship. There is a single owner of the business,
so the owner is answerable to no other owner.
c. Partnership. If the partnership fails and cannot pay its
, liabilities, creditors can force the partners to pay the
business’s debts from their personal assets. A
partnership affords more protection for creditors than a
proprietorship because there are two or more owners to
share this liability.
(5 min.) S 1-2
1. The entity assumption applies.
2. Application of the entity assumption will separate
Osmond’s personal assets from the assets of Simple
Treats, Inc. This will help Osmond, investors, and
lenders know how much assets, liabilities and equity the business has,
and this knowledge will help all parties evaluate the business
realistically.
(5-10 min.) S 1-3
a. Stable-monetary-unit assumption
b. Historical cost principle; $300 is the accounting
valueof the laptop
c. Historical cost principle; the sale price is the amount
actually received from the sale
d. Entity assumption
(10 min.) S 1-4
Computed amounts in boxes
All Chapters Included
,Financial Accounting, 13th Edition by C William Thomas and Wendy M. Tietz
Chapters 1 - 12
,Chapter 1
The Financial Statements
Ethics Check
(5-10 min.) EC 1-1
a. Objectivity and independence
b. Due care
c. Integrity
d. Integrity
Short Exercises
(10 min.) S 1-1
a. Corporation, limited partners of a Limited-
liability partnership (LLP) and Limited-liability
company (LLC). If any of these businesses fails and
cannot pay its liabilities, creditors cannot force the
owners to pay the business’s debts from the owners’
personal assets. Creditors can go after the general
partner of a limited liability partnership.
b. Proprietorship. There is a single owner of the business,
so the owner is answerable to no other owner.
c. Partnership. If the partnership fails and cannot pay its
, liabilities, creditors can force the partners to pay the
business’s debts from their personal assets. A
partnership affords more protection for creditors than a
proprietorship because there are two or more owners to
share this liability.
(5 min.) S 1-2
1. The entity assumption applies.
2. Application of the entity assumption will separate
Osmond’s personal assets from the assets of Simple
Treats, Inc. This will help Osmond, investors, and
lenders know how much assets, liabilities and equity the business has,
and this knowledge will help all parties evaluate the business
realistically.
(5-10 min.) S 1-3
a. Stable-monetary-unit assumption
b. Historical cost principle; $300 is the accounting
valueof the laptop
c. Historical cost principle; the sale price is the amount
actually received from the sale
d. Entity assumption
(10 min.) S 1-4
Computed amounts in boxes
