Test Bank for Financial Accounting, 13th Edition by C. William Thomas and Wendy M. Tietz

TEST BANK for Financial Accounting
13th Edition
by C William Thomas and Wendy M. Tietz
Verified Chapter's 1 - 12 | Complete

,TABLE OF CONTENTS
1. The Financial Statements

2. Transaction Analysis

3. Accrual Accounting and Income

4. Internal Control and Cash

5. Receivables and Revenue

6. Inventory and Cost of Goods Sold

7. Plant Assets, Natural Resources, and Intangibles

8. Current and Contingent Liabilities

9. Long-Term Liabilities

10. Stockholders' Equity

11. The Statement of Cash Flows

12. Financial Statement Analysis

,1. The Financial Statements



Full Test Bank for Financial Accounting 13th Edition C. William Thomas, Wendy M Tietz

Financial Accounting, 13e (Thomas/Tietz)
Chapter 1 The Financial Statements

Learning Objective 1-1

1) Accounting is an information system that measures business activities.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

2) Bookkeeping is a mechanical part of accounting.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

3) Accounting is often called the language of business.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

4) Accounting produces financial statements, which report information about a business.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement, Reporting

5) The accounting process begins and ends with people making decisions.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

, 6) Accounting information is used by investors and creditors, but not by regulatory bodies.
Answer: FALSE
Explanation: It is used by individuals, investors, creditors, nonprofits, and regulatory bodies.
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Industry Sector, Legal/Regulatory
AICPA Functional: Measurement, Reporting

7) Since Habitat for Humanity is not concerned about making a profit, the entity does not need to use
accounting information.
Answer: FALSE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Industry Sector, Legal/Regulatory
AICPA Functional: Measurement, Reporting

8) The business records of a sole proprietorship should include the proprietor's personal finances.
Answer: FALSE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

9) A partnership is a taxpaying entity.
Answer: FALSE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement

10) Stockholders have no personal obligation for the corporation's debts.
Answer: TRUE
Diff: 1
LO: 1-1
AACSB: Reflective Thinking
AICPA Bus Persp: Legal/Regulatory
AICPA Functional: Measurement




11) Accounting:
A) measures pbusiness pactivities.
B) processes pdata pinto preports pand pcommunicates pthe pdata pto pdecision pmakers.
C) is poften pcalled pthe planguage pof pbusiness.
D) is pall pof pthe
pabove.pAnswer: p D
Diff: p2
LO: p 1-1