Financial Accounting – 13th Edition by C. William Thomas & Wendy M. Tietz | Complete A+ Graded Test Bank

Financial Accounting 13th Edition by C.
William Thomas & Wendy M. Tietz Test Bank
A+Graded |Verified questions and answers
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, 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
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LO: 1-1

AACSB: Reflective Thinking
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, 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
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, 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 business activities.

B) processes data into reports and communicates the data to decision makers.

C) is often called the language of business.

D) is all of the above. Answer: D
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