Franklyn A Plus Pass
TEST BANK for Financial Accounting 6th Edition by David
Spiceland, Wayne M. Thomas
All Chapters Fully Covered| Verified Questions & 100% Accurate
Solutions for Exam Preparations| A+ PASS RATED
All Answers are at the End of Each Chapter
Fr
an
kl
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e
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, Franklyn A Plus Pass
Chapter 1
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Accounting is a system of maintaining records of a company's operations and
communicating that information to decision makers.
⊚ true
⊚ false
2) Accounting information is used by investors to decide whether to invest in a company's
stock.
⊚ true
⊚ false
3) Accounting information is used by creditors to decide whether to invest in a company's
stock.
⊚ true
⊚ false
4) The primary functions of financial accounting are to measure business activities of a
company and to communicate those measurements to internal parties for decision-making
purposes.
⊚ true
⊚ false
Fr
an
kl
yn
e
A
pl
us
Pa
2
ss
, Franklyn A Plus Pass
5) Financing activities include transactions the company has with investors and creditors.
⊚ true
⊚ false
6) Investing activities include transactions involving the purchase and sale of resources that
are expected to benefit the company for several years.
⊚ true
⊚ false
7) Operating activities include transactions that relate to the primary operations of the
company, such as providing products and services to customers and the associated costs.
⊚ true
⊚ false
8) A corporation is an entity that is legally separate from its owners.
⊚ true
⊚ false
9) Cash, inventory for sale to customers, supplies, and buildings are examples of liabilities.
⊚ true
⊚ false
Fr
10) Amounts owed to suppliers, employees, the government in the form of taxes, and utility
companies are examples of liabilities.
an
⊚ true
⊚ false
kl
yn
11) If total assets of a company equal $12,000 and total stockholders' equity equals $4,000,
e
then total liabilities equal $8,000.
⊚ true
A
⊚ false
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us
Pa
3
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, Franklyn A Plus Pass
12) If total liabilities of a company equal $16,000 and total stockholders' equity equals
$9,000, then total assets equal $7,000.
⊚ true
⊚ false
13) The accounting equation shows that a company's total resources equal creditors' and
owners' claims to those resources.
⊚ true
⊚ false
14) The costs related to rent, utilities, and salaries in the current reporting period are
examples of liabilities.
⊚ true
⊚ false
15) The difference between revenues and expenses is referred to as net income or net loss.
⊚ true
⊚ false
16) If a company reports revenues of $17,000 and expenses of $12,000, then net income
equals $5,000.
⊚ true
⊚ false
Fr
an
17) Expenses include a company’s costs of providing products and services to customers, as
well as cash payments to its stockholders.
kl
⊚ true
⊚
yn
false
e
18) Dividends represent a return of the company's profits to its owners, the stockholders.
A
⊚ true
⊚
pl
false
us
Pa
4
ss
TEST BANK for Financial Accounting 6th Edition by David
Spiceland, Wayne M. Thomas
All Chapters Fully Covered| Verified Questions & 100% Accurate
Solutions for Exam Preparations| A+ PASS RATED
All Answers are at the End of Each Chapter
Fr
an
kl
yn
e
A
pl
us
Pa
1
ss
, Franklyn A Plus Pass
Chapter 1
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Accounting is a system of maintaining records of a company's operations and
communicating that information to decision makers.
⊚ true
⊚ false
2) Accounting information is used by investors to decide whether to invest in a company's
stock.
⊚ true
⊚ false
3) Accounting information is used by creditors to decide whether to invest in a company's
stock.
⊚ true
⊚ false
4) The primary functions of financial accounting are to measure business activities of a
company and to communicate those measurements to internal parties for decision-making
purposes.
⊚ true
⊚ false
Fr
an
kl
yn
e
A
pl
us
Pa
2
ss
, Franklyn A Plus Pass
5) Financing activities include transactions the company has with investors and creditors.
⊚ true
⊚ false
6) Investing activities include transactions involving the purchase and sale of resources that
are expected to benefit the company for several years.
⊚ true
⊚ false
7) Operating activities include transactions that relate to the primary operations of the
company, such as providing products and services to customers and the associated costs.
⊚ true
⊚ false
8) A corporation is an entity that is legally separate from its owners.
⊚ true
⊚ false
9) Cash, inventory for sale to customers, supplies, and buildings are examples of liabilities.
⊚ true
⊚ false
Fr
10) Amounts owed to suppliers, employees, the government in the form of taxes, and utility
companies are examples of liabilities.
an
⊚ true
⊚ false
kl
yn
11) If total assets of a company equal $12,000 and total stockholders' equity equals $4,000,
e
then total liabilities equal $8,000.
⊚ true
A
⊚ false
pl
us
Pa
3
ss
, Franklyn A Plus Pass
12) If total liabilities of a company equal $16,000 and total stockholders' equity equals
$9,000, then total assets equal $7,000.
⊚ true
⊚ false
13) The accounting equation shows that a company's total resources equal creditors' and
owners' claims to those resources.
⊚ true
⊚ false
14) The costs related to rent, utilities, and salaries in the current reporting period are
examples of liabilities.
⊚ true
⊚ false
15) The difference between revenues and expenses is referred to as net income or net loss.
⊚ true
⊚ false
16) If a company reports revenues of $17,000 and expenses of $12,000, then net income
equals $5,000.
⊚ true
⊚ false
Fr
an
17) Expenses include a company’s costs of providing products and services to customers, as
well as cash payments to its stockholders.
kl
⊚ true
⊚
yn
false
e
18) Dividends represent a return of the company's profits to its owners, the stockholders.
A
⊚ true
⊚
pl
false
us
Pa
4
ss
