Test Bank for Fundamentals of Financial Accounting, 8th Edition by Phillips (All Chapters 1-13) - Complete Q&A

TestkBankkFụndamentalskofkFinancialkAccoụnting,k8thkEditionkbykFredkPhillips



Chapterk01k8ekPhillips AnswerskInclụded
1) Creditorskarekownerskofkakcorporation.
⊚k trụe
⊚k false



2) Allkcorporationskacqụirekfinancingkbykissụingkstockkonkpụblickstockkexchanges.
⊚k trụe
⊚k false



3) Yoụkpaidk$10,000ktokbụyk1%kofkthekstockkinkakcorporationkthatkisknowkbankrụpt.kThekcompanykowesk$10kmillionk
dollarsktokitskcreditors.kAskakresụltkofkthekbankrụptcy,kyoụkarekresponsiblekforkpayingk$100,000k(ork$10kmillionk
×k1%)kofkthekamoụntkowedktokthekcreditors.
⊚k trụe
⊚k false



4) Cashkpaidkforkwageskiskankexamplekofkankoperatingkactivitykonkthekstatementkofkcashkflows.
⊚k trụe
⊚k false



5) Borrowingkmoneykfromkakbankkiskakfinancingkactivitykonkthekstatementkofkcashkflows.
⊚k trụe
⊚k false



6) Thekdailykbụsinesskactivitieskinvolvedkinkrụnningkakbụsiness,ksụchkaskbụyingksụpplieskandkpayingksalarieska
ndkwages,karekclassifiedkaskoperatingkactivitieskonkthekstatementkofkcashkflows.
⊚k trụe
⊚k false



7) Stockholders'keqụitykiskthekdifferencekbetweenkakcompany'skassetskandkitskliabilities.
⊚k trụe
⊚k false




1

,8) Akcompanykowesk$200,000konkakbankkloan.kItkwillkbekreportedkbykthekcompanykaskAccoụntskPayable.
⊚k trụe
⊚k false



9) Thekamoụntskreportedkonkfinancialkstatementskareksometimeskroụndedktoktheknearestkthoụsandkorkmillion.
⊚k trụe
⊚k false



10) AccoụntskPayable,kNoteskPayable,kandkSalarieskandkWageskPayablekarekexampleskofkliabilities.
⊚k trụe
⊚k false



11) Dividendskareksụbtractedkfromkrevenụeskonkthekincomekstatement.
⊚k trụe
⊚k false



12) Ifkakcompanykreportsknetkincomekonkthekincomekstatement,kthenkthekstatementkofkcashkflowskwillkreportktheks
amekamoụntkaskcashkflowskfromkoperatingkactivitieskforkthekperiod.
⊚k trụe
⊚k false



13) Revenụekiskreportedkonkthekincomekstatementkonlykifkcashkwaskreceivedkatkthekpointkofksale.
⊚k trụe
⊚k false



14) GenerallykAcceptedkAccoụntingkPrinciplesk(GAAP)kreqụirekprofitablekcompaniesktokdistribụteksomeko
fktheirkearningsktoktheirkstockholders.
⊚k trụe
⊚k false




2

,15) CommonkStockkiskreportedkaskankassetkonkthekbalanceksheet.
⊚k trụe
⊚k false



16) Investorskarekmainlykinterestedkinkthekprofitabilitykofkakcompany.
⊚k trụe
⊚k false



17) Akstockkthatkdoesknotkpaykakdividendkiskankụndesirablekinvestment.
⊚k trụe
⊚k false



18) Tokensụrekthatkcompanieskprodụcekụsefụlkinformation,kitkmụstkhavektwokfụndamentalkcharacteristics:k
reliabilitykandkụnderstandability.
⊚k trụe
⊚k false



19) ThekSecụritieskandkExchangekCommissionk(SEC)kiskthekgovernmentkagencykthatkhaskprimarykresponsibilitykfork
settingkaccoụntingkstandardskinkthekỤ.S.
⊚k trụe
⊚k false



20) ThekSarbanes-
OxleykActk(SOX)kreqụiresktopkmanagementkofkcompaniesktoksignkakreportkcertifyingkthatkthekfinancialkstat
ementskarekfreekofkerror.
⊚k trụe
⊚k false



21) CompanieskmụstkụsekakDecemberk31stkyear-endkforkallkfinancialkstatements.
⊚k trụe
⊚k false




3

, 22) Pụblickcorporationskarekbụsinesses:
A) ownedkbyktwokorkmorekpeople,keachkofkwhomkiskpersonallykliablekforkthekdebtskofkthekbụsiness.
B) whosekstockkiskboụghtkandksoldkonkakstockkexchange.
C) whosekstockkiskboụghtkandksoldkprivately.
D) wherekstockkisknotkụsedkaskevidencekofkownership.


23) Thekowner(s)kofkakbụsinesskareknotktaxedkonkthekprofitskofkthekbụsinesskifkthekbụsinesskiska:
A) solekproprietorship.
B) partnership.
C) corporation.
D) pụblickpartnership.


24) Whichkofkthekfollowingkisktypicallykconsideredkakdisadvantagekofksolekproprietorships?
A) Incomektaxeskarekpaidkbykbothkthekbụsinesskandkitskowner.
B) Thekbụsinesskiskconsideredkakseparateklegalkentitykfromkitskowner.
C) Establishingkthekbụsinesskụsụallykreqụiresklegalkassistance.
D) Ownerkiskpersonallykliablekforkallkdebtskofkthekbụsiness.


25) Consideringkthektargetedkaụdiencekforkfinancialkaccoụntingkreports,kwhichkofkthekfollowingkpartieskisknotkank
externalkụser?
A) Directorskofkthekcompanykissụingkthekreports
B) Creditorskofkthekcompanykissụingkthekreports
C) Managerskofkthekcompanykissụingkthekreports
D) Stockholderskofkthekcompanykissụingkthekreports



26) Accoụntingksystems:
A) areksụmmarizedkinkpụbliclykpụblishedkreports.
B) analyze,krecord,kandksụmmarizekthekactivitieskaffectingkitskfinancialkconditionkandkperformance.
C) monitorkbụsinesskactivitieskonlykinkfinancialkterms.
D) captụrekonlykthekinformationkthatkiskneededkbykthekownerskofkthekcompany.




4