Financial Accounting, 6th Edition – David Spiceland, Wayne Thomas & Don Herrmann – Complete Test Bank (Chapters 1-12)

TEST BANK Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann

,TABLE OF CONTENTS hs hs hs




Chapter 1: A Framework for Financial Accounting
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Chapter 2: The Accounting Cycle: During the Period
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Chapter 3: The Accounting Cycle: End of the Period
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Chapter 4: Cash and Internal Controls
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Chapter 5: Receivables and Sales
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Chapter 6: Inventory and Cost of Goods Sold
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Chapter 7: Long-Term Assets
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Chapter 8: Current Liabilities
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Chapter 9: Long-Term Liabilities
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Chapter 10: Stockholders’ Equity
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Chapter 11: Statement of Cash Flows
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Chapter 12: Financial Statement Analysis
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,Chapter 1 A Framework for Financial Accounting
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1) Accounting is a system of maintaining records of a company's operations and communicatingthat hs hs hs hs hs hs hs hs hs hs hs hs h
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information to decision makers. hs hs hs




Answer: TRUE D hs hs




ifficulty:1Easy hs hs




Topic: Defining Accounting
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Learning Objective: 01- hs h s




01 Describe the two primary functions of financial accounting.Bloom's: Remember
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AACSB: Reflective ThinkingA hs hs h
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ICPA: BB Critical Thinking
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2) Accounting information is used by investors to decide whether to invest in a company's stock. hs hs hs hs hs hs hs hs hs hs hs hs hs hs




Answer: TRUE D hs hs




ifficulty:1Easy hs hs




Topic: Defining Accounting
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Learning Objective: 01- hs h s




01 Describe the two primary functions of financial accounting.Bloom's: Remember
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AACSB: Reflective ThinkingA hs hs h
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ICPA: BB Critical Thinking
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3) Accounting information is used by creditors to decide whether to invest in a company's stock. hs hs hs hs hs hs hs hs hs hs hs hs hs hs




Answer: FALSE h s




Explanation: Creditors lend money to a company.Diff hs hs hs hs hs hs h
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iculty: 1 Easy hs hs




Topic: Defining Accounting
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Learning Objective: 01- hs h s




01 Describe the two primary functions of financial accounting.Bloom's: Remember
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AACSB: Reflective ThinkingA hs hs h
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ICPA: BB Critical Thinking
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4) The primary functions of financial accounting are to measure business activities of a companyand t
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o communicate those measurements to internal parties for decision-making purposes.
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Answer: FALSE h s




Explanation: Financial accounting primarily serves to provide information to external parties.Diffi
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culty: 2 Medium
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Topic: Defining Accounting
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Learning Objective: 01- hs h s




01 Describe the two primary functions of financial accounting.Bloom's: Understand
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AACSB: Reflective ThinkingA hs hs h
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ICPA: BB Critical Thinking
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, 5) Financing activities are transactions involving external sources of funding.
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Answer: TRUE D hs hs




ifficulty:1Easy hs hs




Topic: Measuring Business Activities
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Learning Objective: 01- hs h s




02 Understand the business activities that financial accountingmeasures.
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Bloom's: Remember AACSB: h s hs




h Reflective ThinkingAICPA:
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sFN Measurement
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6) Investing activities include the purchase and sale of long-term resources.
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Answer: TRUE D hs hs




ifficulty:1Easy hs hs




Topic: Measuring Business Activities
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Learning Objective: 01- hs h s




02 Understand the business activities that financial accountingmeasures.
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Bloom's: Remember AACSB: h s hs




h Reflective ThinkingAICPA:
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sFN Measurement
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7) Operating activities include transactions that relate to the primary operations of the company.
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Answer: TRUE D hs hs




ifficulty:1Easy hs hs




Topic: Measuring Business Activities
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Learning Objective: 01- hs h s




02 Understand the business activities that financial accountingmeasures.
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Bloom's: Remember AACSB: h s hs




h Reflective ThinkingAICPA:
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sFN Measurement
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8) A corporation is an entity that is legally separate from its owners.
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Answer: TRUE D hs hs




ifficulty:1Easy hs hs




Topic: Measuring Business Activities
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Learning Objective: 01- hs h s




02 Understand the business activities that financial accountingmeasures.
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Bloom's: Remember AACSB: R hshshs hs hs




eflective ThinkingAICPA: BB hs h
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Critical Thinking
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