STUDY NOTES & REFERENCE GUIDE
TEST BANK
Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann
nolanjack ‐ Stuvia | Page 1 of 32
, STUDY NOTES & REFERENCE GUIDE
TABLE OF CONTENTS
Chapter 1: A Framework for Financial Accounting Chapter 2: The
Accounting Cycle: During the Period Chapter 3: The Accounting
Cycle: End of the Period Chapter 4: Cash and Internal Controls
Chapter 5: Receivables and Sales
Chapter 6: Inventory and Cost of Goods Sold Chapter 7: Long-Term
Assets
Chapter 8: Current Liabilities Chapter 9: Long-
Term Liabilities Chapter 10: Stockholders’ Equity
Chapter 11: Statement of Cash Flows
Chapter 12: Financial Statement Analysis
nolanjack ‐ Stuvia | Page 2 of 32
, STUDY NOTES & REFERENCE GUIDE
Chapter 1 A Framework for Financial Accounting
1) Accounting is a system of maintaining records of a company's operations and
communicating that information to decision makers.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial
accounting.Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
2) Accounting information is used by investors to decide whether to invest in a company's
stock.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial
accounting.Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
3) Accounting information is used by creditors to decide whether to invest in a company's
stock.
Answer: FALSE
Explanation: Creditors lend money to a company.
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial
accounting.Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
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.
Answer: FALSE
Explanation: Financial accounting primarily serves to provide information to external parties.
Difficulty: 2 Medium
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial
accounting.Bloom's: Understand
AACSB: Reflective Thinking
nolanjack ‐ Stuvia | Page 3 of 32
, STUDY NOTES & REFERENCE GUIDE
AICPA: BB Critical Thinking
nolanjack ‐ Stuvia | Page 4 of 32
TEST BANK
Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann
nolanjack ‐ Stuvia | Page 1 of 32
, STUDY NOTES & REFERENCE GUIDE
TABLE OF CONTENTS
Chapter 1: A Framework for Financial Accounting Chapter 2: The
Accounting Cycle: During the Period Chapter 3: The Accounting
Cycle: End of the Period Chapter 4: Cash and Internal Controls
Chapter 5: Receivables and Sales
Chapter 6: Inventory and Cost of Goods Sold Chapter 7: Long-Term
Assets
Chapter 8: Current Liabilities Chapter 9: Long-
Term Liabilities Chapter 10: Stockholders’ Equity
Chapter 11: Statement of Cash Flows
Chapter 12: Financial Statement Analysis
nolanjack ‐ Stuvia | Page 2 of 32
, STUDY NOTES & REFERENCE GUIDE
Chapter 1 A Framework for Financial Accounting
1) Accounting is a system of maintaining records of a company's operations and
communicating that information to decision makers.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial
accounting.Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
2) Accounting information is used by investors to decide whether to invest in a company's
stock.
Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial
accounting.Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
3) Accounting information is used by creditors to decide whether to invest in a company's
stock.
Answer: FALSE
Explanation: Creditors lend money to a company.
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial
accounting.Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
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.
Answer: FALSE
Explanation: Financial accounting primarily serves to provide information to external parties.
Difficulty: 2 Medium
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial
accounting.Bloom's: Understand
AACSB: Reflective Thinking
nolanjack ‐ Stuvia | Page 3 of 32
, STUDY NOTES & REFERENCE GUIDE
AICPA: BB Critical Thinking
nolanjack ‐ Stuvia | Page 4 of 32
