,TEST BANK FOR !x !x
Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herr
!x !x !x !x !x !x !x !x !x !x
mann
Chapter 1 !x A Framework for Financial Accounting
!x !x !x !x
1) Accounting is a system of maintaining records of a company's operations and communicating
!x !x !x !x !x !x !x !x !x !x !x !x !
that information to decision makers.
x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy !x !x
Topic: Defining Accounting !x
Learning Objective: 01- !x
01 Describe the two primary functions of financial accounting. Bloom's:
!x !x !x !x !x !x !x !x !x
Remember
AACSB:
Reflective Thinking !x !x
AICPA: BB Critical Thinking !x !x
2) Accounting information is used by investors to decide whether to invest in a company's stock.
!x !x !x !x !x !x !x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy !x !x
Topic: Defining Accounting !x
Learning Objective: 01- !x
01 Describe the two primary functions of financial accounting. Bloom's:
!x !x !x !x !x !x !x !x !x
Remember
AACSB:
Reflective Thinking !x !x
AICPA: BB Critical Thinking !x !x
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
!x !x !x !x !x !x !x !x !x !x !x !x !x !x
Answer: FALSE ! x ! x
Explanation:
Creditors lend money to a company. !x !x !x !x !x !x
Difficulty: 1 Easy !x !x
Topic: Defining Accounting !x
Learning Objective: 01- !x
01 Describe the two primary functions of financial accounting. Bloom's:
!x !x !x !x !x !x !x !x !x
Remember
AACSB:
Reflective Thinking !x !x
AICPA: BB Critical Thinking !x !x
4) The primary functions of financial accounting are to measure business activities of a company
!x !x !x !x !x !x !x !x !x !x !x !x !x
and to communicate those measurements to internal parties for decision-making purposes.
!x !x !x !x !x !x !x !x !x !x !x
Answer: FALSE ! x ! x
Explanation:
, Financial accounting primarily serves to provide information to external parties.
!x !x !x !x !x !x !x !x !x !
Difficulty: 2 Medium
x !x !x
Topic: Defining Accounting
!x
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
!x !x !x !x !x !x !x !x !x
, Bloom's:
Understand AACSB: !x
Reflective Thinking x! !x !x
AICPA: BB Critical Thinking !x !x
5) Financing activities are transactions involving external sources of funding.
!x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy
!x !x
Topic: Measuring Business Activities !x !x
Learning Objective: 01-
!x
02 Understand the business activities that financial accounting measures. Bloom's:
!x !x !x !x !x !x !x !x !x Remember
AACSB:
Reflective Thinking !x !x
AICPA: FN Measurement !x
6) Investing activities include the purchase and sale of long-term resources.
!x !x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy
!x !x
Topic: Measuring Business Activities !x !x
Learning Objective: 01-
!x
02 Understand the business activities that financial accounting measures. Bloom's:
!x !x !x !x !x !x !x !x !x Remember
AACSB:
Reflective Thinking !x !x
AICPA: FN Measurement !x
7) Operating activities include transactions that relate to the primary operations of the company.
!x !x !x !x !x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy
!x !x
Topic: Measuring Business Activities !x !x
Learning Objective: 01-
!x
02 Understand the business activities that financial accounting measures. Bloom's:
!x !x !x !x !x !x !x !x !x Remember
AACSB:
Reflective Thinking !x !x
AICPA: FN Measurement !x
8) A corporation is an entity that is legally separate from its owners.
!x !x !x !x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy
!x !x
Topic: Measuring Business Activities !x !x
Learning Objective: 01-
!x
02 Understand the business activities that financial accounting measures. Bloom's:
!x !x !x !x !x !x !x !x !x Remember
AACSB:
Reflective Thinking !x !x
AICPA: BB Critical Thinking !x !x
Financial Accounting 6th Edition by David Spiceland, Wayne Thomas, Don Herr
!x !x !x !x !x !x !x !x !x !x
mann
Chapter 1 !x A Framework for Financial Accounting
!x !x !x !x
1) Accounting is a system of maintaining records of a company's operations and communicating
!x !x !x !x !x !x !x !x !x !x !x !x !
that information to decision makers.
x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy !x !x
Topic: Defining Accounting !x
Learning Objective: 01- !x
01 Describe the two primary functions of financial accounting. Bloom's:
!x !x !x !x !x !x !x !x !x
Remember
AACSB:
Reflective Thinking !x !x
AICPA: BB Critical Thinking !x !x
2) Accounting information is used by investors to decide whether to invest in a company's stock.
!x !x !x !x !x !x !x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy !x !x
Topic: Defining Accounting !x
Learning Objective: 01- !x
01 Describe the two primary functions of financial accounting. Bloom's:
!x !x !x !x !x !x !x !x !x
Remember
AACSB:
Reflective Thinking !x !x
AICPA: BB Critical Thinking !x !x
3) Accounting information is used by creditors to decide whether to invest in a company's stock.
!x !x !x !x !x !x !x !x !x !x !x !x !x !x
Answer: FALSE ! x ! x
Explanation:
Creditors lend money to a company. !x !x !x !x !x !x
Difficulty: 1 Easy !x !x
Topic: Defining Accounting !x
Learning Objective: 01- !x
01 Describe the two primary functions of financial accounting. Bloom's:
!x !x !x !x !x !x !x !x !x
Remember
AACSB:
Reflective Thinking !x !x
AICPA: BB Critical Thinking !x !x
4) The primary functions of financial accounting are to measure business activities of a company
!x !x !x !x !x !x !x !x !x !x !x !x !x
and to communicate those measurements to internal parties for decision-making purposes.
!x !x !x !x !x !x !x !x !x !x !x
Answer: FALSE ! x ! x
Explanation:
, Financial accounting primarily serves to provide information to external parties.
!x !x !x !x !x !x !x !x !x !
Difficulty: 2 Medium
x !x !x
Topic: Defining Accounting
!x
Learning Objective: 01-01 Describe the two primary functions of financial accounting.
!x !x !x !x !x !x !x !x !x
, Bloom's:
Understand AACSB: !x
Reflective Thinking x! !x !x
AICPA: BB Critical Thinking !x !x
5) Financing activities are transactions involving external sources of funding.
!x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy
!x !x
Topic: Measuring Business Activities !x !x
Learning Objective: 01-
!x
02 Understand the business activities that financial accounting measures. Bloom's:
!x !x !x !x !x !x !x !x !x Remember
AACSB:
Reflective Thinking !x !x
AICPA: FN Measurement !x
6) Investing activities include the purchase and sale of long-term resources.
!x !x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy
!x !x
Topic: Measuring Business Activities !x !x
Learning Objective: 01-
!x
02 Understand the business activities that financial accounting measures. Bloom's:
!x !x !x !x !x !x !x !x !x Remember
AACSB:
Reflective Thinking !x !x
AICPA: FN Measurement !x
7) Operating activities include transactions that relate to the primary operations of the company.
!x !x !x !x !x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy
!x !x
Topic: Measuring Business Activities !x !x
Learning Objective: 01-
!x
02 Understand the business activities that financial accounting measures. Bloom's:
!x !x !x !x !x !x !x !x !x Remember
AACSB:
Reflective Thinking !x !x
AICPA: FN Measurement !x
8) A corporation is an entity that is legally separate from its owners.
!x !x !x !x !x !x !x !x !x !x !x
Answer: TRUE Dif ! x !x
ficulty: 1 Easy
!x !x
Topic: Measuring Business Activities !x !x
Learning Objective: 01-
!x
02 Understand the business activities that financial accounting measures. Bloom's:
!x !x !x !x !x !x !x !x !x Remember
AACSB:
Reflective Thinking !x !x
AICPA: BB Critical Thinking !x !x
