?
A?
VI
TU
_S
ED
OV
PR
AP
,AP
PR TABLE OF CONTENTS
Test Bank: Financial & Managerial Accounting for Decision Makers, 5th Edition
By Hanlon, Magee, Pfeiffer, Kulp, Dragoo
CHAPTER 1 Introducing Financial Accounting
CHAPTER 2
OV Constructing Financial Statements
CHAPTER 3 Adjusting Accounts for Financial Statements
CHAPTER 4 Reporting and Analyzing Cash Flows
CHAPTER 5 Analyzing and Interpreting Financial Statements
ED
CHAPTER 6 Reporting and Analyzing Revenues, Receivables, and Operating Income
CHAPTER 7 Reporting and Analyzing Inventory
CHAPTER 8
_S
Reporting and Analyzing Long-Term Operating Assets
CHAPTER 9 Reporting and Analyzing Liabilities
Reporting and Analyzing Leases, Pensions, Income Taxes, and Commitments and
CHAPTER 10 Contingencies
TU
CHAPTER 11 Reporting and Analyzing Stockholders’ Equity
CHAPTER 12 Reporting and Analyzing Financial Investments
VI
CHAPTER 13 Managerial Accounting: Tools for Decision-Making
CHAPTER 14 Cost Behavior, Activity Analysis, and Cost Estimation
CHAPTER 15 Cost-Volume-Profit Analysis and Planning
A?
CHAPTER 16 Using Relevant Costs and Differential Analysis for Decision-Making
CHAPTER 17 Product Costing: Job and Process Operations
?
CHAPTER 18 Activity-Based Costing, Customer Profitability, and Activity-Based Management
CHAPTER 19 Additional Topics in Product Costing
CHAPTER 20 Decision-Making: Pricing and Product Cost Management
CHAPTER 21 Operational Budgeting and Profit Planning
CHAPTER 22 Standard Costs and Performance Reports
Performance Measurement Using Segment Reporting, Transfer Pricing, and
CHAPTER 23 Balanced Scorecard
CHAPTER 24 Capital Budgeting Decisions
,AP
PR Chapter 1
Introducing Financial Accounting
OV
Learning Objectives – Coverage by question
ED Multiple Essay
True/False Choice Exercises Problems Questions
LO1-1 Identify the users of
accounting information and
1, 2 1-3 1, 2 2, 5, 6
discuss the costs and benefits of
disclosure. (p. 1-3)
LO1-2 Describe a company's
_S
business activities and explain
how these activities are 3-6 4, 5 3 1, 6
represented by the accounting
equation. (p. 1-7)
TU
LO1-3 Introduce the four key
financial statements including the VI
balance sheet, income statement,
7-9 4, 6-11 4-11 1-5
statement of stockholders' equity,
and statement of cash flows.
(p. 1-11)
LO1-4 Describe the institutions
A?
that regulate financial accounting
and their role in establishing 10-12 12, 19, 20 3, 4
generally accepted accounting
principles. (p. 1-16)
?
LO1-5 Compute two key ratios
that are commonly used to
assess profitability and risk - 13, 14 13-18 13, 14
return on equity and the debt-to-
equity ratio. (p. 1-21)
LO1-6 Appendix 1A: Explain the
conceptual framework for 15, 16 21, 22 12 3, 5
financial reporting. (p. 1-25)
© Cambridge Business Publishers, 2024
, AP
Chapter 1: Introducing Financial Accounting
PR
True/False
Topic: Cost and benefits of disclosure
LO: 1
OV
1. One reason companies are motivated to disclose financial information to external decision makers is
that it may lower financing and operating costs.
Answer: True
Rationale: For example, when a company applies for a loan, the bank uses the company’s financial
statements to help determine the appropriate interest rate. Without this financial information, a company
ED
may have a higher cost of borrowing or not obtain the loan at all.
Topic: Demand for accounting information
LO: 1
2. Financial accounting is designed primarily for decision makers within the company.
Answer: False
_S
Rationale: Financial accounting is designed primarily to provide information to decision makers outside
of the company, while managerial accounting is designed primarily for decision makers within the
company.
TU
Topic: Investing activities
LO: 2
3. Investing activities are the acquiring and disposing of liabilities that a company needs in order to finance
its operating activities.
VI
Answer: False
Rationale: Investing activities are the acquiring and disposing of assets that a company needs for the
A?
production and sale of a company’s products and services.
Topic: Accounting equation
LO: 2
4. Assets must always equal liabilities plus stockholders’ equity.
Answer: True
?
Rationale: The accounting equation is Assets = Liabilities + Stockholders’ Equity. This relation must
always stay in balance.
© Cambridge Business Publishers, 2024
Test Bank, Chapter 1
A?
VI
TU
_S
ED
OV
PR
AP
,AP
PR TABLE OF CONTENTS
Test Bank: Financial & Managerial Accounting for Decision Makers, 5th Edition
By Hanlon, Magee, Pfeiffer, Kulp, Dragoo
CHAPTER 1 Introducing Financial Accounting
CHAPTER 2
OV Constructing Financial Statements
CHAPTER 3 Adjusting Accounts for Financial Statements
CHAPTER 4 Reporting and Analyzing Cash Flows
CHAPTER 5 Analyzing and Interpreting Financial Statements
ED
CHAPTER 6 Reporting and Analyzing Revenues, Receivables, and Operating Income
CHAPTER 7 Reporting and Analyzing Inventory
CHAPTER 8
_S
Reporting and Analyzing Long-Term Operating Assets
CHAPTER 9 Reporting and Analyzing Liabilities
Reporting and Analyzing Leases, Pensions, Income Taxes, and Commitments and
CHAPTER 10 Contingencies
TU
CHAPTER 11 Reporting and Analyzing Stockholders’ Equity
CHAPTER 12 Reporting and Analyzing Financial Investments
VI
CHAPTER 13 Managerial Accounting: Tools for Decision-Making
CHAPTER 14 Cost Behavior, Activity Analysis, and Cost Estimation
CHAPTER 15 Cost-Volume-Profit Analysis and Planning
A?
CHAPTER 16 Using Relevant Costs and Differential Analysis for Decision-Making
CHAPTER 17 Product Costing: Job and Process Operations
?
CHAPTER 18 Activity-Based Costing, Customer Profitability, and Activity-Based Management
CHAPTER 19 Additional Topics in Product Costing
CHAPTER 20 Decision-Making: Pricing and Product Cost Management
CHAPTER 21 Operational Budgeting and Profit Planning
CHAPTER 22 Standard Costs and Performance Reports
Performance Measurement Using Segment Reporting, Transfer Pricing, and
CHAPTER 23 Balanced Scorecard
CHAPTER 24 Capital Budgeting Decisions
,AP
PR Chapter 1
Introducing Financial Accounting
OV
Learning Objectives – Coverage by question
ED Multiple Essay
True/False Choice Exercises Problems Questions
LO1-1 Identify the users of
accounting information and
1, 2 1-3 1, 2 2, 5, 6
discuss the costs and benefits of
disclosure. (p. 1-3)
LO1-2 Describe a company's
_S
business activities and explain
how these activities are 3-6 4, 5 3 1, 6
represented by the accounting
equation. (p. 1-7)
TU
LO1-3 Introduce the four key
financial statements including the VI
balance sheet, income statement,
7-9 4, 6-11 4-11 1-5
statement of stockholders' equity,
and statement of cash flows.
(p. 1-11)
LO1-4 Describe the institutions
A?
that regulate financial accounting
and their role in establishing 10-12 12, 19, 20 3, 4
generally accepted accounting
principles. (p. 1-16)
?
LO1-5 Compute two key ratios
that are commonly used to
assess profitability and risk - 13, 14 13-18 13, 14
return on equity and the debt-to-
equity ratio. (p. 1-21)
LO1-6 Appendix 1A: Explain the
conceptual framework for 15, 16 21, 22 12 3, 5
financial reporting. (p. 1-25)
© Cambridge Business Publishers, 2024
, AP
Chapter 1: Introducing Financial Accounting
PR
True/False
Topic: Cost and benefits of disclosure
LO: 1
OV
1. One reason companies are motivated to disclose financial information to external decision makers is
that it may lower financing and operating costs.
Answer: True
Rationale: For example, when a company applies for a loan, the bank uses the company’s financial
statements to help determine the appropriate interest rate. Without this financial information, a company
ED
may have a higher cost of borrowing or not obtain the loan at all.
Topic: Demand for accounting information
LO: 1
2. Financial accounting is designed primarily for decision makers within the company.
Answer: False
_S
Rationale: Financial accounting is designed primarily to provide information to decision makers outside
of the company, while managerial accounting is designed primarily for decision makers within the
company.
TU
Topic: Investing activities
LO: 2
3. Investing activities are the acquiring and disposing of liabilities that a company needs in order to finance
its operating activities.
VI
Answer: False
Rationale: Investing activities are the acquiring and disposing of assets that a company needs for the
A?
production and sale of a company’s products and services.
Topic: Accounting equation
LO: 2
4. Assets must always equal liabilities plus stockholders’ equity.
Answer: True
?
Rationale: The accounting equation is Assets = Liabilities + Stockholders’ Equity. This relation must
always stay in balance.
© Cambridge Business Publishers, 2024
Test Bank, Chapter 1
