Test Bank for Survey of Accounting 10e 10th Edition by Carl Warren, Amanda Farmer
g g g g g g g g g g g g g
Chapg 01g 10eg Warren
All Chapters
g
Indicateg whetherg theg statementg isg trueg org false.
g 1.gThegpopularitygofgthegsolegproprietorshipgisgduegtogthegeasegandglowgcostgofgorganizing.
a. True
b. False
ANSWER:g True
g 2.gAgcorporationgisgagbusinessgthatgisglegallygseparategandgdistinctgfromgitsgowners.
a. True
b. False
ANSWER:g True
g 3.gMerchandisinggbusinessesgproducegproductsgrathergthangprovidegservicesgtogcustomers.
a. True
b. False
ANSWER:g False
g 4.gAgpartnershipgisgownedgbygtwogorgmoregindividuals.
a. True
b. False
ANSWER:g True
g 5.gAglimitedgliabilitygcompanygcombinesgattributesgofgagpartnershipgandgagcorporation.
a. True
b. False
ANSWER:g True
g 6.gThegownershipgofgagproprietorshipgisgdividedgintogsharesgofgstockgownedgbygitsgstockholders.
a. True
b. False
ANSWER:g False
g 7.gAccountinggisgoftengcalledgtheg"languagegofgbusiness"gbecausegbusinessginformationgisgcommunicatedgtog
stakeholders.
a. True
b. False
ANSWER:g True
Pageg1
,Name: Class: Date:
Chapg 01g 10eg Warren
g 8.gJohngDeeregisgagleadinggmanufacturergofgagriculturalgmachinerygingthegworld,gproducinggproductsgthatgserveguni
quegmarketgneeds.gTherefore,gJohngDeeregisgangexamplegofgagcompanygthatgusesgagpremium-
pricegapproachgtogattractgcustomers.
a. True
b. False
ANSWER:g True
g 9.gCreditorsghavegpreferencegtogassetsgbehindgstockholdersgifgagbusinessgfails.
a. True
b. False
ANSWER:g False
g 10.gAgliabilitygisgaglegalgobligationgtogrepaygthegamountgborrowedgaccordinggtogthegtermsgofgthegborrowinggagreement.
a. True
b. False
ANSWER:g True
g 11.gThegbalancegsheetgrepresentsgthegaccountinggequation.
a. True
b. False
ANSWER:g True
g 12.gAgprimarygdisadvantagegofgcorporationsgisgthatgthegfinancialgresourcesgavailablegtogthemgareglimited.
a. True
b. False
ANSWER:g False
g 13.gAssetsgaregacquiredgthroughginvestinggactivitiesgwhengresourcesgaregpurchased.
a. True
b. False
ANSWER:g True
g 14.gThegobjectivegofgmostgbusinessesgisgtogmaximizegprofits.
a. True
b. False
ANSWER:g True
Pageg2
,Name: Class: Date:
Chapg 01g 10eg Warren
g 15.gThegstockholders'gequitygofgagcompanygshouldgequalgthegsumgofgitsgtotalgassetsgandgtotalgliabilities.
a. True
b. False
ANSWER:g False
g 16.gThegbranchgofgaccountinggrelatedgtogthegmanagement'sgfinancialgdecisionsgisgknowngasgfinancialgaccounting.
a. True
b. False
ANSWER:g False
g 17.gAllgmerchandisinggbusinessesgaregorganizedgasgcorporations.
a. True
b. False
ANSWER:g False
g 18.gStockholdersgofgagcorporationgaregitsginternalgstakeholders.
a. True
b. False
ANSWER:g False
g 19.gThegbasicgtypegofgstockgissuedgtogownersgisgcalledgcommongstock.
a. True
b. False
ANSWER:g True
g 20.gAgbusinessgstakeholderghasganginterestgingthegeconomicgperformancegofgagcompany.
a. True
b. False
ANSWER:g True
g 21.gManufacturinggbusinessesgchangegbasicginputsgintogproductsgthatgaregsoldgtogindividualgcustomers.
a. True
b. False
ANSWER:g True
g 22.gCompaniesgusinggaglow-costgemphasisgprovidegproductsgandgservicesgthatgcompetegongfeaturesgothergthangprice.
a. True
b. False
ANSWER:g False
Pageg3
, Name: Class: Date:
Chapg 01g 10eg Warren
Indicateg theg answerg choiceg thatg bestg completesg theg statementg org answersg theg question.
g 23.gWhengagbusinessgborrowsgmoney,gwhichgofgthegfollowinggisgincurred?
a. Angaccumulatedgdepletion
b. Agliability
c. Agloss
d. Angaccruedgexpenditure
ANSWER:g b
g 24.gWhatgisgthegprimarygobjectivegofgmostgbusinesses?
a. Togmaximizegprofits
b. Togpaygdividendsgtogstockholders
c. Togprovidegagbenefitgtogsociety
d. Togmanufacturegagqualitygproduct
ANSWER:g a
g 25.gAgnotegpayablegrequiresgpaymentgofgthegamountgborrowedgplusg .
a. interest
b. tax
c. overhead
d. dividend
ANSWER:g a
g 26.gIfgtheregaregnogbeginninggretainedgearnings,gnetgincomegofg$31,200,gandgendinggretainedgearningsgofg$9,000,ghowg
muchgaregdividends?
a. $40,200
b. $9,000
c. $22,200
d. $4,500
ANSWER:g c
g 27.gWhichgofgthegfollowinggisgnotgangexamplegofgagcapitalgmarketgstakeholder?
a. Banks
b. Owners
c. Suppliers
d. Stockholders
ANSWER:g c
Pageg4
g g g g g g g g g g g g g
Chapg 01g 10eg Warren
All Chapters
g
Indicateg whetherg theg statementg isg trueg org false.
g 1.gThegpopularitygofgthegsolegproprietorshipgisgduegtogthegeasegandglowgcostgofgorganizing.
a. True
b. False
ANSWER:g True
g 2.gAgcorporationgisgagbusinessgthatgisglegallygseparategandgdistinctgfromgitsgowners.
a. True
b. False
ANSWER:g True
g 3.gMerchandisinggbusinessesgproducegproductsgrathergthangprovidegservicesgtogcustomers.
a. True
b. False
ANSWER:g False
g 4.gAgpartnershipgisgownedgbygtwogorgmoregindividuals.
a. True
b. False
ANSWER:g True
g 5.gAglimitedgliabilitygcompanygcombinesgattributesgofgagpartnershipgandgagcorporation.
a. True
b. False
ANSWER:g True
g 6.gThegownershipgofgagproprietorshipgisgdividedgintogsharesgofgstockgownedgbygitsgstockholders.
a. True
b. False
ANSWER:g False
g 7.gAccountinggisgoftengcalledgtheg"languagegofgbusiness"gbecausegbusinessginformationgisgcommunicatedgtog
stakeholders.
a. True
b. False
ANSWER:g True
Pageg1
,Name: Class: Date:
Chapg 01g 10eg Warren
g 8.gJohngDeeregisgagleadinggmanufacturergofgagriculturalgmachinerygingthegworld,gproducinggproductsgthatgserveguni
quegmarketgneeds.gTherefore,gJohngDeeregisgangexamplegofgagcompanygthatgusesgagpremium-
pricegapproachgtogattractgcustomers.
a. True
b. False
ANSWER:g True
g 9.gCreditorsghavegpreferencegtogassetsgbehindgstockholdersgifgagbusinessgfails.
a. True
b. False
ANSWER:g False
g 10.gAgliabilitygisgaglegalgobligationgtogrepaygthegamountgborrowedgaccordinggtogthegtermsgofgthegborrowinggagreement.
a. True
b. False
ANSWER:g True
g 11.gThegbalancegsheetgrepresentsgthegaccountinggequation.
a. True
b. False
ANSWER:g True
g 12.gAgprimarygdisadvantagegofgcorporationsgisgthatgthegfinancialgresourcesgavailablegtogthemgareglimited.
a. True
b. False
ANSWER:g False
g 13.gAssetsgaregacquiredgthroughginvestinggactivitiesgwhengresourcesgaregpurchased.
a. True
b. False
ANSWER:g True
g 14.gThegobjectivegofgmostgbusinessesgisgtogmaximizegprofits.
a. True
b. False
ANSWER:g True
Pageg2
,Name: Class: Date:
Chapg 01g 10eg Warren
g 15.gThegstockholders'gequitygofgagcompanygshouldgequalgthegsumgofgitsgtotalgassetsgandgtotalgliabilities.
a. True
b. False
ANSWER:g False
g 16.gThegbranchgofgaccountinggrelatedgtogthegmanagement'sgfinancialgdecisionsgisgknowngasgfinancialgaccounting.
a. True
b. False
ANSWER:g False
g 17.gAllgmerchandisinggbusinessesgaregorganizedgasgcorporations.
a. True
b. False
ANSWER:g False
g 18.gStockholdersgofgagcorporationgaregitsginternalgstakeholders.
a. True
b. False
ANSWER:g False
g 19.gThegbasicgtypegofgstockgissuedgtogownersgisgcalledgcommongstock.
a. True
b. False
ANSWER:g True
g 20.gAgbusinessgstakeholderghasganginterestgingthegeconomicgperformancegofgagcompany.
a. True
b. False
ANSWER:g True
g 21.gManufacturinggbusinessesgchangegbasicginputsgintogproductsgthatgaregsoldgtogindividualgcustomers.
a. True
b. False
ANSWER:g True
g 22.gCompaniesgusinggaglow-costgemphasisgprovidegproductsgandgservicesgthatgcompetegongfeaturesgothergthangprice.
a. True
b. False
ANSWER:g False
Pageg3
, Name: Class: Date:
Chapg 01g 10eg Warren
Indicateg theg answerg choiceg thatg bestg completesg theg statementg org answersg theg question.
g 23.gWhengagbusinessgborrowsgmoney,gwhichgofgthegfollowinggisgincurred?
a. Angaccumulatedgdepletion
b. Agliability
c. Agloss
d. Angaccruedgexpenditure
ANSWER:g b
g 24.gWhatgisgthegprimarygobjectivegofgmostgbusinesses?
a. Togmaximizegprofits
b. Togpaygdividendsgtogstockholders
c. Togprovidegagbenefitgtogsociety
d. Togmanufacturegagqualitygproduct
ANSWER:g a
g 25.gAgnotegpayablegrequiresgpaymentgofgthegamountgborrowedgplusg .
a. interest
b. tax
c. overhead
d. dividend
ANSWER:g a
g 26.gIfgtheregaregnogbeginninggretainedgearnings,gnetgincomegofg$31,200,gandgendinggretainedgearningsgofg$9,000,ghowg
muchgaregdividends?
a. $40,200
b. $9,000
c. $22,200
d. $4,500
ANSWER:g c
g 27.gWhichgofgthegfollowinggisgnotgangexamplegofgagcapitalgmarketgstakeholder?
a. Banks
b. Owners
c. Suppliers
d. Stockholders
ANSWER:g c
Pageg4
