TESTj BANKj FOR
FundamentalsjofjFinancialjAccounting,j8thjEditionjbyjFredjPhillips
✅
Chapterj01j8ejPhillips AnswersjIncluded
1) Creditorsjarejownersjofjajcorporation.
⊚j true
⊚j false
2) Alljcorporationsjacquirejfinancingjbyjissuingjstockjonjpublicjstockjexchanges.
⊚j true
⊚j false
3) Youjpaidj$10,000jtojbuyj1%jofjthejstockjinjajcorporationjthatjisjnowjbankrupt.jThejcompanyjow
esj$10jmillionjdollarsjtojitsjcreditors.jAsjajresultjofjthejbankruptcy,jyoujarejresponsiblejforjpayin
gj$100,000j(orj$10jmillionj×j1%)jofjthejamountjowedjtojthejcreditors.
⊚j true
⊚j false
4) Cashjpaidjforjwagesjisjanjexamplejofjanjoperatingjactivityjonjthejstatementjofjcashjflows.
⊚j true
⊚j false
5) Borrowingjmoneyjfromjajbankjisjajfinancingjactivityjonjthejstatementjofjcashjflows.
⊚j true
⊚j false
6) Thejdailyjbusinessjactivitiesjinvolvedjinjrunningjajbusiness,jsuchjasjbuyingjsuppliesjandjpa
yingjsalariesjandjwages,jarejclassifiedjasjoperatingjactivitiesjonjthejstatementjofjcashjflows
.
⊚j true
⊚j false
7) Stockholders'jequityjisjthejdifferencejbetweenjajcompany'sjassetsjandjitsjliabilities.
⊚j true
⊚j false
,8) Ajcompanyjowesj$200,000jonjajbankjloan.jItjwilljbejreportedjbyjthejcompanyjasjAccountsjPa
yable.
⊚j true
⊚j false
9) Thejamountsjreportedjonjfinancialjstatementsjarejsometimesjroundedjtojthejnearestjthousandjorj
million.
⊚j true
⊚j false
10) AccountsjPayable,jNotesjPayable,jandjSalariesjandjWagesjPayablejarejexamplesjofjlia
bilities.
⊚j true
⊚j false
11) Dividendsjarejsubtractedjfromjrevenuesjonjthejincomejstatement.
⊚j true
⊚j false
12) Ifjajcompanyjreportsjnetjincomejonjthejincomejstatement,jthenjthejstatementjofjcashjflowsjwil
ljreportjthejsamejamountjasjcashjflowsjfromjoperatingjactivitiesjforjthejperiod.
⊚j true
⊚j false
13) Revenuejisjreportedjonjthejincomejstatementjonlyjifjcashjwasjreceivedjatjthejpointjofjsale.
⊚j true
⊚j false
14) GenerallyjAcceptedjAccountingjPrinciplesj(GAAP)jrequirejprofitablejcompaniesjtojd
istributejsomejofjtheirjearningsjtojtheirjstockholders.
⊚j true
⊚j false
,15) CommonjStockjisjreportedjasjanjassetjonjthejbalancejsheet.
⊚j true
⊚j false
16) Investorsjarejmainlyjinterestedjinjthejprofitabilityjofjajcompany.
⊚j true
⊚j false
17) Ajstockjthatjdoesjnotjpayjajdividendjisjanjundesirablejinvestment.
⊚j true
⊚j false
18) Tojensurejthatjcompaniesjproducejusefuljinformation,jitjmustjhavejtwojfundamentaljch
aracteristics:jreliabilityjandjunderstandability.
⊚j true
⊚j false
19) ThejSecuritiesjandjExchangejCommissionj(SEC)jisjthejgovernmentjagencyjthatjhasjprimaryjre
sponsibilityjforjsettingjaccountingjstandardsjinjthejU.S.
⊚j true
⊚j false
20) ThejSarbanes-
OxleyjActj(SOX)jrequiresjtopjmanagementjofjcompaniesjtojsignjajreportjcertifyingjthatjth
ejfinancialjstatementsjarejfreejofjerror.
⊚j true
⊚j false
21) CompaniesjmustjusejajDecemberj31stjyear-endjforjalljfinancialjstatements.
⊚j false
, ⊚j true
⊚j false
FundamentalsjofjFinancialjAccounting,j8thjEditionjbyjFredjPhillips
✅
Chapterj01j8ejPhillips AnswersjIncluded
1) Creditorsjarejownersjofjajcorporation.
⊚j true
⊚j false
2) Alljcorporationsjacquirejfinancingjbyjissuingjstockjonjpublicjstockjexchanges.
⊚j true
⊚j false
3) Youjpaidj$10,000jtojbuyj1%jofjthejstockjinjajcorporationjthatjisjnowjbankrupt.jThejcompanyjow
esj$10jmillionjdollarsjtojitsjcreditors.jAsjajresultjofjthejbankruptcy,jyoujarejresponsiblejforjpayin
gj$100,000j(orj$10jmillionj×j1%)jofjthejamountjowedjtojthejcreditors.
⊚j true
⊚j false
4) Cashjpaidjforjwagesjisjanjexamplejofjanjoperatingjactivityjonjthejstatementjofjcashjflows.
⊚j true
⊚j false
5) Borrowingjmoneyjfromjajbankjisjajfinancingjactivityjonjthejstatementjofjcashjflows.
⊚j true
⊚j false
6) Thejdailyjbusinessjactivitiesjinvolvedjinjrunningjajbusiness,jsuchjasjbuyingjsuppliesjandjpa
yingjsalariesjandjwages,jarejclassifiedjasjoperatingjactivitiesjonjthejstatementjofjcashjflows
.
⊚j true
⊚j false
7) Stockholders'jequityjisjthejdifferencejbetweenjajcompany'sjassetsjandjitsjliabilities.
⊚j true
⊚j false
,8) Ajcompanyjowesj$200,000jonjajbankjloan.jItjwilljbejreportedjbyjthejcompanyjasjAccountsjPa
yable.
⊚j true
⊚j false
9) Thejamountsjreportedjonjfinancialjstatementsjarejsometimesjroundedjtojthejnearestjthousandjorj
million.
⊚j true
⊚j false
10) AccountsjPayable,jNotesjPayable,jandjSalariesjandjWagesjPayablejarejexamplesjofjlia
bilities.
⊚j true
⊚j false
11) Dividendsjarejsubtractedjfromjrevenuesjonjthejincomejstatement.
⊚j true
⊚j false
12) Ifjajcompanyjreportsjnetjincomejonjthejincomejstatement,jthenjthejstatementjofjcashjflowsjwil
ljreportjthejsamejamountjasjcashjflowsjfromjoperatingjactivitiesjforjthejperiod.
⊚j true
⊚j false
13) Revenuejisjreportedjonjthejincomejstatementjonlyjifjcashjwasjreceivedjatjthejpointjofjsale.
⊚j true
⊚j false
14) GenerallyjAcceptedjAccountingjPrinciplesj(GAAP)jrequirejprofitablejcompaniesjtojd
istributejsomejofjtheirjearningsjtojtheirjstockholders.
⊚j true
⊚j false
,15) CommonjStockjisjreportedjasjanjassetjonjthejbalancejsheet.
⊚j true
⊚j false
16) Investorsjarejmainlyjinterestedjinjthejprofitabilityjofjajcompany.
⊚j true
⊚j false
17) Ajstockjthatjdoesjnotjpayjajdividendjisjanjundesirablejinvestment.
⊚j true
⊚j false
18) Tojensurejthatjcompaniesjproducejusefuljinformation,jitjmustjhavejtwojfundamentaljch
aracteristics:jreliabilityjandjunderstandability.
⊚j true
⊚j false
19) ThejSecuritiesjandjExchangejCommissionj(SEC)jisjthejgovernmentjagencyjthatjhasjprimaryjre
sponsibilityjforjsettingjaccountingjstandardsjinjthejU.S.
⊚j true
⊚j false
20) ThejSarbanes-
OxleyjActj(SOX)jrequiresjtopjmanagementjofjcompaniesjtojsignjajreportjcertifyingjthatjth
ejfinancialjstatementsjarejfreejofjerror.
⊚j true
⊚j false
21) CompaniesjmustjusejajDecemberj31stjyear-endjforjalljfinancialjstatements.
⊚j false
, ⊚j true
⊚j false
