TEST BANK Financial Accounting, 6th Edition Chapters 1 – 12 Complete By David Spiceland, Wayne Thomas and Don Herrmann

TEST BANK
Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann

,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

,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 aprimary afunctions aof afinancial aaccounting aare ato ameasure abusiness aactivities aof aa
acompanyaand ato acommunicate athose ameasurements ato ainternal aparties afor adecision-making
apurposes.


Answer: a FALSE
Explanation: aFinancial aaccounting aprimarily aserves ato aprovide ainformation ato aexternal aparties.
aDifficulty: a2 aMedium
Topic: a Defining aAccounting
Learning aObjective: a 01-01 aDescribe athe atwo aprimary afunctions aof afinancial aaccounting.
aBloom's: aUnderstand
AACSB: aReflective aThinking
aAICPA: a BB aCritical
aThinking

, 5) Financing aactivities aare atransactions ainvolving aexternal asources aof afunding.

Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement


6) Investing aactivities ainclude athe apurchase aand asale aof along-term aresources.

Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement


7) Operating aactivities ainclude atransactions athat arelate ato athe aprimary aoperations aof athe acompany.

Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.
Bloom's: a Remember
aAACSB: a Reflective
aThinkingaAICPA: a FN
aMeasurement


8) A acorporation ais aan aentity athat ais alegally aseparate afrom aits aowners.

Answer: aTRUE
aDifficulty: a1
aEasy
Topic: a Measuring aBusiness aActivities
Learning aObjective: a 01-02 aUnderstand athe abusiness aactivities athat afinancial aaccounting
ameasures.