Test Bank for Survey of Accounting 10e 10th Edition by Carl Warren, Amanda Farmer
c c c c c c c c c c c c c
Chapc 01c 10ecWarren
All Chapters
c
Indicatec whetherc thec statementc isc truec orc false.
c 1.cThecpopularitycofcthecsolecproprietorshipciscduectoctheceasecandclowccostcofcorganizing.
a. True
b. False
ANSWER:c True
c 2.cAccorporationciscacbusinesscthatcisclegallycseparatecandcdistinctcfromcitscowners.
a. True
b. False
ANSWER:c True
c 3.cMerchandisingcbusinessescproducecproductscrathercthancprovidecservicesctoccustomers.
a. True
b. False
ANSWER:c False
c 4.cAcpartnershipciscownedcbyctwocorcmorecindividuals.
a. True
b. False
ANSWER:c True
c 5.cAclimitedcliabilityccompanyccombinescattributescofcacpartnershipcandcaccorporation.
a. True
b. False
ANSWER:c True
c 6.cThecownershipcofcacproprietorshipciscdividedcintocsharescofcstockcownedcbycitscstockholders.
a. True
b. False
ANSWER:c False
c 7.cAccountingciscoftenccalledcthec"languagecofcbusiness"cbecausecbusinesscinformationcisccommunicatedctocst
akeholders.
a. True
b. False
ANSWER:c True
Pagec1
,Name: Class: Date:
Chapc 01c 10ecWarren
c 8.cJohncDeereciscacleadingcmanufacturercofcagriculturalcmachinerycincthecworld,cproducingcproductscthatcservecuniq
uecmarketcneeds.cTherefore,cJohncDeereciscancexamplecofcaccompanycthatcusescacpremium-
pricecapproachctocattractccustomers.
a. True
b. False
ANSWER:c True
c 9.cCreditorschavecpreferencectocassetscbehindcstockholderscifcacbusinesscfails.
a. True
b. False
ANSWER:c False
c 10.cAcliabilityciscaclegalcobligationctocrepaycthecamountcborrowedcaccordingctocthectermscofcthecborrowingcagreement.
a. True
b. False
ANSWER:c True
c 11.cThecbalancecsheetcrepresentscthecaccountingcequation.
a. True
b. False
ANSWER:c True
c 12.cAcprimarycdisadvantagecofccorporationsciscthatcthecfinancialcresourcescavailablectocthemcareclimited.
a. True
b. False
ANSWER:c False
c 13.cAssetscarecacquiredcthroughcinvestingcactivitiescwhencresourcescarecpurchased.
a. True
b. False
ANSWER:c True
c 14.cThecobjectivecofcmostcbusinessescisctocmaximizecprofits.
a. True
b. False
ANSWER:c True
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,Name: Class: Date:
Chapc 01c 10ecWarren
c 15.cThecstockholders'cequitycofcaccompanycshouldcequalcthecsumcofcitsctotalcassetscandctotalcliabilities.
a. True
b. False
ANSWER:c False
c 16.cThecbranchcofcaccountingcrelatedctocthecmanagement'scfinancialcdecisionsciscknowncascfinancialcaccounting.
a. True
b. False
ANSWER:c False
c 17.cAllcmerchandisingcbusinessescarecorganizedcasccorporations.
a. True
b. False
ANSWER:c False
c 18.cStockholderscofcaccorporationcarecitscinternalcstakeholders.
a. True
b. False
ANSWER:c False
c 19.cThecbasicctypecofcstockcissuedctocownerscisccalledccommoncstock.
a. True
b. False
ANSWER:c True
c 20.cAcbusinesscstakeholderchascancinterestcincthececonomiccperformancecofcaccompany.
a. True
b. False
ANSWER:c True
c 21.cManufacturingcbusinessescchangecbasiccinputscintocproductscthatcarecsoldctocindividualccustomers.
a. True
b. False
ANSWER:c True
c 22.cCompaniescusingcaclow-costcemphasiscprovidecproductscandcservicescthatccompeteconcfeaturescothercthancprice.
a. True
b. False
ANSWER:c False
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, Name: Class: Date:
Chapc 01c 10ecWarren
Indicatec thec answerc choicec thatc bestc completesc thec statementc orc answersc thec question.
c 23.cWhencacbusinesscborrowscmoney,cwhichcofcthecfollowingciscincurred?
a. Ancaccumulatedcdepletion
b. Acliability
c. Acloss
d. Ancaccruedcexpenditure
ANSWER:c b
c 24.cWhatciscthecprimarycobjectivecofcmostcbusinesses?
a. Tocmaximizecprofits
b. Tocpaycdividendsctocstockholders
c. Tocprovidecacbenefitctocsociety
d. Tocmanufacturecacqualitycproduct
ANSWER:c a
c 25.cAcnotecpayablecrequirescpaymentcofcthecamountcborrowedcplusc .
a. interest
b. tax
c. overhead
d. dividend
ANSWER:c a
c 26.cIfctherecarecnocbeginningcretainedcearnings,cnetcincomecofc$31,200,candcendingcretainedcearningscofc$9,000,chowcm
uchcarecdividends?
a. $40,200
b. $9,000
c. $22,200
d. $4,500
ANSWER:c c
c 27.cWhichcofcthecfollowingciscnotcancexamplecofcaccapitalcmarketcstakeholder?
a. Banks
b. Owners
c. Suppliers
d. Stockholders
ANSWER:c c
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c c c c c c c c c c c c c
Chapc 01c 10ecWarren
All Chapters
c
Indicatec whetherc thec statementc isc truec orc false.
c 1.cThecpopularitycofcthecsolecproprietorshipciscduectoctheceasecandclowccostcofcorganizing.
a. True
b. False
ANSWER:c True
c 2.cAccorporationciscacbusinesscthatcisclegallycseparatecandcdistinctcfromcitscowners.
a. True
b. False
ANSWER:c True
c 3.cMerchandisingcbusinessescproducecproductscrathercthancprovidecservicesctoccustomers.
a. True
b. False
ANSWER:c False
c 4.cAcpartnershipciscownedcbyctwocorcmorecindividuals.
a. True
b. False
ANSWER:c True
c 5.cAclimitedcliabilityccompanyccombinescattributescofcacpartnershipcandcaccorporation.
a. True
b. False
ANSWER:c True
c 6.cThecownershipcofcacproprietorshipciscdividedcintocsharescofcstockcownedcbycitscstockholders.
a. True
b. False
ANSWER:c False
c 7.cAccountingciscoftenccalledcthec"languagecofcbusiness"cbecausecbusinesscinformationcisccommunicatedctocst
akeholders.
a. True
b. False
ANSWER:c True
Pagec1
,Name: Class: Date:
Chapc 01c 10ecWarren
c 8.cJohncDeereciscacleadingcmanufacturercofcagriculturalcmachinerycincthecworld,cproducingcproductscthatcservecuniq
uecmarketcneeds.cTherefore,cJohncDeereciscancexamplecofcaccompanycthatcusescacpremium-
pricecapproachctocattractccustomers.
a. True
b. False
ANSWER:c True
c 9.cCreditorschavecpreferencectocassetscbehindcstockholderscifcacbusinesscfails.
a. True
b. False
ANSWER:c False
c 10.cAcliabilityciscaclegalcobligationctocrepaycthecamountcborrowedcaccordingctocthectermscofcthecborrowingcagreement.
a. True
b. False
ANSWER:c True
c 11.cThecbalancecsheetcrepresentscthecaccountingcequation.
a. True
b. False
ANSWER:c True
c 12.cAcprimarycdisadvantagecofccorporationsciscthatcthecfinancialcresourcescavailablectocthemcareclimited.
a. True
b. False
ANSWER:c False
c 13.cAssetscarecacquiredcthroughcinvestingcactivitiescwhencresourcescarecpurchased.
a. True
b. False
ANSWER:c True
c 14.cThecobjectivecofcmostcbusinessescisctocmaximizecprofits.
a. True
b. False
ANSWER:c True
Pagec2
,Name: Class: Date:
Chapc 01c 10ecWarren
c 15.cThecstockholders'cequitycofcaccompanycshouldcequalcthecsumcofcitsctotalcassetscandctotalcliabilities.
a. True
b. False
ANSWER:c False
c 16.cThecbranchcofcaccountingcrelatedctocthecmanagement'scfinancialcdecisionsciscknowncascfinancialcaccounting.
a. True
b. False
ANSWER:c False
c 17.cAllcmerchandisingcbusinessescarecorganizedcasccorporations.
a. True
b. False
ANSWER:c False
c 18.cStockholderscofcaccorporationcarecitscinternalcstakeholders.
a. True
b. False
ANSWER:c False
c 19.cThecbasicctypecofcstockcissuedctocownerscisccalledccommoncstock.
a. True
b. False
ANSWER:c True
c 20.cAcbusinesscstakeholderchascancinterestcincthececonomiccperformancecofcaccompany.
a. True
b. False
ANSWER:c True
c 21.cManufacturingcbusinessescchangecbasiccinputscintocproductscthatcarecsoldctocindividualccustomers.
a. True
b. False
ANSWER:c True
c 22.cCompaniescusingcaclow-costcemphasiscprovidecproductscandcservicescthatccompeteconcfeaturescothercthancprice.
a. True
b. False
ANSWER:c False
Pagec3
, Name: Class: Date:
Chapc 01c 10ecWarren
Indicatec thec answerc choicec thatc bestc completesc thec statementc orc answersc thec question.
c 23.cWhencacbusinesscborrowscmoney,cwhichcofcthecfollowingciscincurred?
a. Ancaccumulatedcdepletion
b. Acliability
c. Acloss
d. Ancaccruedcexpenditure
ANSWER:c b
c 24.cWhatciscthecprimarycobjectivecofcmostcbusinesses?
a. Tocmaximizecprofits
b. Tocpaycdividendsctocstockholders
c. Tocprovidecacbenefitctocsociety
d. Tocmanufacturecacqualitycproduct
ANSWER:c a
c 25.cAcnotecpayablecrequirescpaymentcofcthecamountcborrowedcplusc .
a. interest
b. tax
c. overhead
d. dividend
ANSWER:c a
c 26.cIfctherecarecnocbeginningcretainedcearnings,cnetcincomecofc$31,200,candcendingcretainedcearningscofc$9,000,chowcm
uchcarecdividends?
a. $40,200
b. $9,000
c. $22,200
d. $4,500
ANSWER:c c
c 27.cWhichcofcthecfollowingciscnotcancexamplecofcaccapitalcmarketcstakeholder?
a. Banks
b. Owners
c. Suppliers
d. Stockholders
ANSWER:c c
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