Financial Accounting Fundamentals, 8th Edition

TEST BANK
Financial Accounting Fundamentals, 8th Edition

By John Wild, Chapter 1 - 13

,Chapter 1: Accounting in Business

Chapter 2: Accounting for Business Transactions Chapter 3: Adjusting Accounts for

Financial Statements Chapter 4: Accounting for Merchandising Operations Chapter

5: Inventories and Cost of Sales

Chapter 6: Cash, Fraud, and Internal Control Chapter 7: Accounting

for Receivables Chapter 8: Accounting for Long-Term Assets Chapter

9: Accounting for Current Liabilities

Chapter 10: Accounting for Long-Term Liabilities Chapter 11: Corporate

Reporting and Analysis Chapter 12: Reporting Cash Flows


Chapter 13: Analysis of Financial Statements

, Answers are at the End of Each Chapter

Chapter 1: Accounting in Business

Student name:
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Accounting is an information and measurement system that identifies, records,
andcommunicates an organization's business activities.
⊚ true

⊚ false
2) Accounting includes the analysis and interpretation of information.
⊚ true


⊚ false
3) Financial accounting focuses on the needs of external users, who get accounting
informationfrom general-purpose financial statements.
⊚ true


⊚ false
4) Internal users of accounting information do not directly manage the organization and
havelimited access to its accounting information.
⊚ true


⊚ false
5) Auditors verify the effectiveness of internal controls.
⊚ true


⊚ false
6) External auditors examine financial statements to verify that they are prepared
according
togenerally accepted accounting principles.
⊚ true


⊚ false
7) External users include lenders, shareholders, customers, and regulators.
⊚ true


⊚ false

, 8) Internal users include lenders, shareholders, brokers and nonexecutive employees.
⊚ true


⊚ false
9) Opportunities in accounting include auditing, consulting, market research, and tax planning.
⊚ true


⊚ false
10) The fraud triangle shows that three factors that push a person to commit fraud
areopportunity, pressure, and rationalization.
⊚ true


⊚ false
11) Internal controls are procedures to protect assets, ensure reliable accounting,
promoteefficiency, and uphold company policies.
⊚ true


⊚ false
12) A partnership is a business owned by two or more people.
⊚ true


⊚ false
13) Owners of a corporation are called shareholders or stockholders.
⊚ true


⊚ false
14) In a partnership, the owners are called stockholders.
⊚ true


⊚ false
15) The balance sheet shows a company's net income or loss over a period of time.
⊚ true


⊚ false
16) The Financial Accounting Standards Board (FASB) is given the task of setting generally
accepted accounting principles (GAAP) from the Securities and Exchange Commission.
⊚ true
⊚ false