Test Bank – Fundamentals of Financial Accounting, 8th Edition – Fred Phillips, Shana Clor-Proell, Robert Libby, & Patricia Libby – ISBN 9781266669484 (Chapters 1–13 Covered)

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Fundamentals of
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Financial Accounting
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8th Edition
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TEST BANK
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Fred Phillips, Shana Clor-Proell, Robert Libby
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Patricia Libby
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Comprehensive Test Bank for Instructors and
Students
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9781266669484
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© Fred Phillips, Shana Clor-Proell, Robert Libby & Patricia Libby.
All rights reserved. Reproduction or distribution without permission is
prohibited.




© MEDCONNOISSEUR

, TABLE OF CONTENTS

Test Bank – Fundamentals of Financial Accounting (8th Ed.)
Authors: Fred Phillips, Shana Clor-Proell, Robert Libby, and Patricia Libby
ISBN: 9781266669484
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PART I: THE ACCOUNTING CYCLE AND FINANCIAL STATEMENTS

Chapter 1: Business Decisions and Financial Accounting
Chapter 2: The Balance Sheet
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Chapter 3: The Income Statement
Chapter 4: Adjustments, Financial Statements, and Financial Results

PART II: INTERNAL CONTROLS AND OPERATIONAL ACCOUNTING

Chapter 5: Fraud, Internal Control, and Cash
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Chapter 6: Merchandising Operations and the Multistep Income Statement
Chapter 7: Inventory and Cost of Goods Sold
Chapter 8: Receivables, Bad Debt Expense, and Interest Revenue
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PART III: ASSETS, LIABILITIES, AND EQUITY

Chapter 9: Long-Lived Tangible and Intangible Assets
Chapter 10: Liabilities
Chapter 11: Stockholders’ Equity
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PART IV: ANALYSIS AND CASH FLOWS

Chapter 12: Statement of Cash Flows
Chapter 13: Measuring and Evaluating Financial Performance
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, Test Bank Fundamentals of Financial Accounting, 8th Edition by Fred Phillips



Chapter 01 8e Phillips Answers Included ✅
1) Creditors are owners of a corporation.
⊚ true
⊚ false
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2) All corporations acquire financing by issuing stock on public stock exchanges.
⊚ true
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⊚ false



3) You paid $10,000 to buy 1% of the stock in a corporation that is now bankrupt. The company
owes $10 million dollars to its creditors. As a result of the bankruptcy, you are responsible
for paying $100,000 (or $10 million × 1%) of the amount owed to the creditors.
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⊚ true
⊚ false
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4) Cash paid for wages is an example of an operating activity on the statement of cash flows.
⊚ true
⊚ false
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5) Borrowing money from a bank is a financing activity on the statement of cash flows.
⊚ true
⊚ false
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6) The daily business activities involved in running a business, such as buying supplies and
paying salaries and wages, are classified as operating activities on the statement of cash
flows.
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⊚ true
⊚ false
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7) Stockholders' equity is the difference between a company's assets and its liabilities.
⊚ true
⊚ false




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, 8) A company owes $200,000 on a bank loan. It will be reported by the company as Accounts
Payable.
⊚ true
⊚ false
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9) The amounts reported on financial statements are sometimes rounded to the nearest thousand
or million.
⊚ true
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⊚ false



10) Accounts Payable, Notes Payable, and Salaries and Wages Payable are examples of
liabilities.
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⊚ true
⊚ false
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11) Dividends are subtracted from revenues on the income statement.
⊚ true
⊚ false
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12) If a company reports net income on the income statement, then the statement of cash flows
will report the same amount as cash flows from operating activities for the period.
⊚ true
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⊚ false



13) Revenue is reported on the income statement only if cash was received at the point of sale.
⊚ true
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⊚ false



14) Generally Accepted Accounting Principles (GAAP) require profitable companies to
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distribute some of their earnings to their stockholders.
⊚ true
⊚ false




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