Survey of Accounting Test Bank 10th Edition | Warren, Farmer & Jones

TEST BANK
Survey of Accounting
CARL WARREN, AMANDA FARMER, JEFFERSON JONES
10th Edition

,Test Bank for Survey of Accounting 10e 10th Edition by Carl Warren, Amanda Farmer


Chap 01 10e Warren
All Chapters ✅
Indicate whether the statement is true or false.
1. The popularity of the sole proprietorship is due to the ease and low cost of organizing.
a. True
b. False

ANSWER: True

2. A corporation is a business that is legally separate and distinct from its owners.
a. True
b. False

ANSWER: True

3. Merchandising businesses produce products rather than provide services to customers.
a. True
b. False

ANSWER: False

4. A partnership is owned by two or more individuals.
a. True
b. False

ANSWER: True

5. A limited liability company combines attributes of a partnership and a corporation.
a. True
b. False

ANSWER: True

6. The ownership of a proprietorship is divided into shares of stock owned by its stockholders.
a. True
b. False

ANSWER: False

7. Accounting is often called the "language of business" because business information is communicated to
stakeholders.
a. True
b. False

ANSWER: True




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,Name: Class: Date:

Chap 01 10e Warren

8. John Deere is a leading manufacturer of agricultural machinery in the world, producing products that serve
unique market needs. Therefore, John Deere is an example of a company that uses a premium-price approach
to attract customers.
a. True
b. False

ANSWER: True

9. Creditors have preference to assets behind stockholders if a business fails.
a. True
b. False

ANSWER: False

10. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing agreement.
a. True
b. False

ANSWER: True

11. The balance sheet represents the accounting equation.
a. True
b. False

ANSWER: True

12. A primary disadvantage of corporations is that the financial resources available to them are limited.
a. True
b. False

ANSWER: False

13. Assets are acquired through investing activities when resources are purchased.
a. True
b. False

ANSWER: True

14. The objective of most businesses is to maximize profits.
a. True
b. False

ANSWER: True




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, Name: Class: Date:

Chap 01 10e Warren

15. The stockholders' equity of a company should equal the sum of its total assets and total liabilities.
a. True
b. False

ANSWER: False

16. The branch of accounting related to the management's financial decisions is known as financial accounting.
a. True
b. False

ANSWER: False

17. All merchandising businesses are organized as corporations.
a. True
b. False

ANSWER: False

18. Stockholders of a corporation are its internal stakeholders.
a. True
b. False

ANSWER: False

19. The basic type of stock issued to owners is called common stock.
a. True
b. False

ANSWER: True

20. A business stakeholder has an interest in the economic performance of a company.
a. True
b. False

ANSWER: True

21. Manufacturing businesses change basic inputs into products that are sold to individual customers.
a. True
b. False

ANSWER: True

22. Companies using a low-cost emphasis provide products and services that compete on features other than price.
a. True
b. False

ANSWER: False


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