Test Bank — Financial Accounting, 6th Edition — Jay S. Rich, Jeff Jones & Linda A. Myers — ISBN 9780357984949 — Latest Update 2025/2026 — (All Chapters Covered)

Financial Accounting
ST

6th Edition
UV


TEST BANK
IA
?_
AP

Jay S. Rich
PR

Comprehensive Test Bank for Instructors
OV

and Students
ED

© Jay S. Rich. All rights reserved. Reproduction or distribution without permission is

prohibited.
??


©DREAMSHUB

, Financial Accounting (6th Edition)
Authors: Jay S. Rich, Jeff Jones, Linda A. Myers
Test Bank
ISBN: 9780357984949
ST

TABLE OF CONTENTS
UV

Chapter 1: Accounting and the Financial Statements
Chapter 2: The Accounting Information System
Chapter 3: Accrual Accounting
Chapter 4: Internal Control and Cash
Chapter 5: Sales and Receivables
IA

Chapter 6: Cost of Goods Sold and Inventory
Chapter 7: Operating Assets
Chapter 8: Current and Contingent Liabilities
?_

Chapter 9: Long- Term Liabilities
Chapter 10: Stockholders’ Equity
Chapter 11: The Statement of Cash Flows
Chapter 12: Financial Statement Analysis
AP
PR
OV
ED
??


©DREAMSHUB

, Name: Class: Date:

Ch 01 Accounting and the Financial Statements
1. Internal users of accounting information include present creditors and management.
a. True
b. False
ST
ANSWER: False

2. Creditors use accounting information to evaluate whether to loan money to a company.
a. True
UV
b. False
ANSWER: True

3. The purpose of financial reporting is to provide economic information to investors, creditors, and other financial
statement users.
IA
a. True
b. False
ANSWER: True
?_
4. Investing is the business activity that measures a company's ability to generate cash from its revenue and expense
activities.
a. True
b. False
AP
ANSWER: False

5. The three main business activities are financing, operating, and investing.
a. True
b. False
PR
ANSWER: True

6. The owners of a sole proprietorship, a partnership, and corporations have limited liability.
a. True
b. False
OV
ANSWER: False

7. There are more corporations than sole proprietorships and partnerships in the United States.
a. True
b. False
ANSWER: False
ED
8. The four basic financial statements are the income statement, retained earnings statement, balance sheet, and statement
of cash flows.
a. True
b. False
??
ANSWER: True

9. Stockholders' equity is composed of two main sources: liabilities and contributed capital.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 1

, Name: Class: Date:

Ch 01 Accounting and the Financial Statements
b. False
ANSWER: False
ST
10. The first step in preparing the classified balance sheet is to list the assets in order of liquidity.
a. True
b. False
ANSWER: False
UV
11. Stockholders' equity is composed of contributed capital and retained earnings.
a. True
b. False
ANSWER: True
IA
12. The classifications in the balance sheet are to help users determine how a company obtained its resources.
a. True
b. False
?_
ANSWER: True

13. Contributed capital is the residual interest that remains after deducting liabilities from stockholders' equity.
a. True
AP
b. False
ANSWER: False

14. Current assets include cash, inventory, equipment, supplies, and accounts receivable.
a. True
PR
b. False
ANSWER: False

15. In the stockholders' equity section of a classified balance sheet, a distinction is made between the amounts invested by
owners and the amounts financed by creditors.
OV
a. True
b. False
ANSWER: False

16. One primary purpose of the classified balance sheet is to help users evaluate the working capital of a company.
a. True
ED
b. False
ANSWER: True

17. Three common categories of long-term assets are property, plant, and equipment; long-term investments;
and intangible and other noncurrent assets.
??
a. True
b. False
ANSWER: True

Copyright Cengage Learning. Powered by Cognero. Page 2