Test Bank for Financial Accounting for Managers, 1st Edition by Wayne Thomas & David Spiceland | Accounting Questions & Answers | 2026/2027 Latest Update

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FULL TEST BANK FOR
Financial Accounting for Managers 1st Edition By Wayne Thomas and David
Spiceland and Mark Nelson



Answers are at the end of each chapter

Chapter 1 Version 1

Student name:__________
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




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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


10) Amounts owed to suppliers, employees, the government in the form of taxes, and utility
companies are examples of liabilities.
⊚ true
⊚ false


11) If total assets of a company equal $12,000 and total stockholders' equity equals $4,000,
then total liabilities equal $8,000.
⊚ true
⊚ false




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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



17) Expenses include a company’s costs of providing products and services to customers, as
well as cash payments to its stockholders.
⊚ true
⊚ false


18) Dividends represent a return of the company's profits to its owners, the stockholders.
⊚ true
⊚ false




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19) One of the differences between a partnership and a corporation is that owners of a
partnership have limited liability.
⊚ true
⊚ false


20) Limited liability means the stockholders are not held personally responsible for the
financial obligations of the corporation.
⊚ true
⊚ false


21) A company's total resources include assets and stockholders' equity.
⊚ true
⊚ false



22) Double taxation refers to a corporation's income being taxed twice—first when the
company pays corporate income taxes on income it earns, and then again when stockholders pay
personal income taxes when the company distributes that income as dividends to them.
⊚ true
⊚ false


23) Financial statements are periodic reports published by the company for the purpose of
providing information to managers.
⊚ true
⊚ false


24) The balance sheet is a financial statement that reports the company's revenues and
expenses over an interval of time.
⊚ true
⊚ false


25) The statement of stockholders' equity is a financial statement that summarizes the
changes in stockholders' equity over an interval of time.


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