Test Bank for Financial Accounting, 5th Edition by David Spiceland, Wayne Thomas, and Don Herrmann

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Financial Accounting, 6th Edition
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Chapters 1 – 12 Complete
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By David Spiceland, Wayne Thomas and Don Herrmann
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,TABLE OF CONTENTS N N N




Chapter 1: A Framework for Financial Accounting
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Chapter 2: The Accounting Cycle: During the Period
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Chapter 3: The Accounting Cycle: End of the Period
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Chapter 4: Cash and Internal Controls
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Chapter 5: Receivables and Sales
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Chapter 6: Inventory and Cost of Goods Sold
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Chapter 7: Long-Term Assets
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Chapter 8: Current Liabilities
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Chapter 9: Long-Term Liabilities
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Chapter 10: Stockholders’ Equity
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Chapter 11: Statement of Cash Flows
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Chapter 12: Financial Statement Analysis
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,Chapter 1 A Framework for Financial Accounting
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1) Accounting is a system of maintaining records of a company's operations and communicatingthat
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information to decision makers.
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Answer: TRUE N




Difficulty: 1 Easy
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Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
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Remember
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AACSB: Reflective Thinking
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AICPA: BB Critical Thinking
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2) Accounting information is used by investors to decide whether to invest in a company's stock.
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Answer: TRUE N




Difficulty: 1 Easy
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Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
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Remember
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AACSB: Reflective Thinking
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AICPA: BB Critical Thinking
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3) Accounting information is used by creditors to decide whether to invest in a company's stock.
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Answer: FALSE N




Explanation: Creditors lend money to a company. N N N N N N




Difficulty: 1 Easy
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Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
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Remember
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AACSB: Reflective Thinking
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AICPA: BB Critical Thinking
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4) The primary functions of financial accounting are to measure business activities of a companyand to
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communicate those measurements to internal parties for decision-making purposes.
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Answer: FALSE N




Explanation: Financial accounting primarily serves to provide information to external parties.Difficulty:
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2 Medium
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Topic: Defining Accounting
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Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
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Understand
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AACSB: Reflective Thinking
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AICPA: BB Critical Thinking
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, 5) Financing activities are transactions involving external sources of funding.
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Answer: TRUE N




Difficulty: 1 Easy
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Topic: Measuring Business Activities
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Learning Objective: 01-02 Understand the business activities that financial accountingmeasures.
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Bloom's: Remember AACSB: N N




Reflective ThinkingAICPA:
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NFN Measurement
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6) Investing activities include the purchase and sale of long-term resources.
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Answer: TRUE N




Difficulty: 1 Easy
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Topic: Measuring Business Activities
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Learning Objective: 01-02 Understand the business activities that financial accountingmeasures.
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Bloom's: Remember AACSB: N N




Reflective ThinkingAICPA:
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NFN Measurement
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7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUE N




Difficulty: 1 Easy
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Topic: Measuring Business Activities
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Learning Objective: 01-02 Understand the business activities that financial accountingmeasures.
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Bloom's: Remember AACSB: N N




Reflective ThinkingAICPA:
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NFN Measurement
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8) A corporation is an entity that is legally separate from its owners.
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Answer: TRUE N




Difficulty: 1 Easy
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Topic: Measuring Business Activities
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Learning Objective: 01-02 Understand the business activities that financial accountingmeasures.
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Bloom's: Remember AACSB:NNN N




Reflective ThinkingAICPA:
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NBB Critical Thinking
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