Fundamentals of Financial Accounting 8e Phillips Test Bank | Free PDF Study Guide & Practice Questions

TESTj BANKj FOR
FundamentalsjofjFinancialjAccounting,j8thjEditionjbyjFredjPhillips

✅
Chapterj01j8ejPhillips AnswersjIncluded
1) Creditorsjarejownersjofjajcorporation.
⊚j true
⊚j false



2) Alljcorporationsjacquirejfinancingjbyjissuingjstockjonjpublicjstockjexchanges.
⊚j true
⊚j false



3) Youjpaidj$10,000jtojbuyj1%jofjthejstockjinjajcorporationjthatjisjnowjbankrupt.jThejcompanyjow
esj$10jmillionjdollarsjtojitsjcreditors.jAsjajresultjofjthejbankruptcy,jyoujarejresponsiblejforjpayin
gj$100,000j(orj$10jmillionj×j1%)jofjthejamountjowedjtojthejcreditors.
⊚j true
⊚j false



4) Cashjpaidjforjwagesjisjanjexamplejofjanjoperatingjactivityjonjthejstatementjofjcashjflows.
⊚j true
⊚j false



5) Borrowingjmoneyjfromjajbankjisjajfinancingjactivityjonjthejstatementjofjcashjflows.
⊚j true
⊚j false



6) Thejdailyjbusinessjactivitiesjinvolvedjinjrunningjajbusiness,jsuchjasjbuyingjsuppliesjandjpa
yingjsalariesjandjwages,jarejclassifiedjasjoperatingjactivitiesjonjthejstatementjofjcashjflows
.
⊚j true
⊚j false



7) Stockholders'jequityjisjthejdifferencejbetweenjajcompany'sjassetsjandjitsjliabilities.
⊚j true
⊚j false

,8) Ajcompanyjowesj$200,000jonjajbankjloan.jItjwilljbejreportedjbyjthejcompanyjasjAccountsjPa
yable.
⊚j true
⊚j false



9) Thejamountsjreportedjonjfinancialjstatementsjarejsometimesjroundedjtojthejnearestjthousandjorj
million.
⊚j true
⊚j false



10) AccountsjPayable,jNotesjPayable,jandjSalariesjandjWagesjPayablejarejexamplesjofjlia
bilities.
⊚j true
⊚j false



11) Dividendsjarejsubtractedjfromjrevenuesjonjthejincomejstatement.
⊚j true
⊚j false



12) Ifjajcompanyjreportsjnetjincomejonjthejincomejstatement,jthenjthejstatementjofjcashjflowsjwil
ljreportjthejsamejamountjasjcashjflowsjfromjoperatingjactivitiesjforjthejperiod.
⊚j true
⊚j false



13) Revenuejisjreportedjonjthejincomejstatementjonlyjifjcashjwasjreceivedjatjthejpointjofjsale.
⊚j true
⊚j false



14) GenerallyjAcceptedjAccountingjPrinciplesj(GAAP)jrequirejprofitablejcompaniesjtojd
istributejsomejofjtheirjearningsjtojtheirjstockholders.
⊚j true
⊚j false

,15) CommonjStockjisjreportedjasjanjassetjonjthejbalancejsheet.
⊚j true
⊚j false



16) Investorsjarejmainlyjinterestedjinjthejprofitabilityjofjajcompany.
⊚j true
⊚j false



17) Ajstockjthatjdoesjnotjpayjajdividendjisjanjundesirablejinvestment.
⊚j true
⊚j false



18) Tojensurejthatjcompaniesjproducejusefuljinformation,jitjmustjhavejtwojfundamentaljch
aracteristics:jreliabilityjandjunderstandability.
⊚j true
⊚j false



19) ThejSecuritiesjandjExchangejCommissionj(SEC)jisjthejgovernmentjagencyjthatjhasjprimaryjre
sponsibilityjforjsettingjaccountingjstandardsjinjthejU.S.
⊚j true
⊚j false



20) ThejSarbanes-
OxleyjActj(SOX)jrequiresjtopjmanagementjofjcompaniesjtojsignjajreportjcertifyingjthatjth
ejfinancialjstatementsjarejfreejofjerror.
⊚j true
⊚j false



21) CompaniesjmustjusejajDecemberj31stjyear-endjforjalljfinancialjstatements.
⊚j false

, ⊚j true




⊚j false