, TESTBANK FOR Survey of Accounting 11th Edition Warren
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
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,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
1. The objective of most businesses is to maximize profits.
a. True
b. False
ANSWER: True
2. A limited liability company combines attributes of a partnership and a corporation.
a. True
b. False
ANSWER: True
3. A partnership is owned by two or more individuals.
a. True
b. False
ANSWER: True
4. Manufacturing businesses change basic inputs into products that are sold to individual customers.
a. True
b. False
ANSWER: True
5. Merchandising businesses produce products rather than provide services to customers.
a. True
b. False
ANSWER: False
6. A corporation is a business that is legally separate and distinct from its owners.
a. True
b. False
ANSWER: True
7. The popularity of the sole proprietorship is due to the ease and low cost of organizing.
a. True
b. False
ANSWER: True
8. A primary disadvantage of corporations is that the financial resources available to them are limited.
a. True
b. False
ANSWER: False
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,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
9. The ownership of a proprietorship is divided into shares of stock owned by its stockholders.
a. True
b. False
ANSWER: False
10. All merchandising businesses are organized as corporations.
a. True
b. False
ANSWER: False
11. Stockholders of a corporation are its internal stakeholders.
a. True
b. False
ANSWER: False
12. John Deere is a leading manufacturer of agricultural machinery in the world, producing products that serve unique
market needs. Therefore, John Deere is an example of a company that uses a premium-price approach to attract
customers.
a. True
b. False
ANSWER: True
13. A business stakeholder has an interest in the economic performance of a company.
a. True
b. False
ANSWER: True
14. Companies using a low-cost emphasis provide products and services that compete on features other than price.
a. True
b. False
ANSWER: False
15. The basic type of stock issued to owners is called common stock.
a. True
b. False
ANSWER: True
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,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
16. Assets are acquired through investing activities when resources are purchased.
a. True
b. False
ANSWER: True
17. Creditors have preference to assets over stockholders if a business fails.
a. True
b. False
ANSWER: False
18. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing agreement.
a. True
b. False
ANSWER: True
19. Accounting is often called the "language of business" because business information is communicated to stakeholders.
a. True
b. False
ANSWER: True
20. The branch of accounting related to the management's financial decisions is known as financial accounting.
a. True
b. False
ANSWER: False
21. The stockholders' equity of a company should equal the sum of its total assets and total liabilities.
a. True
b. False
ANSWER: False
22. The balance sheet represents the accounting equation.
a. True
b. False
ANSWER: True
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,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
23. What is the primary objective of most businesses?
a. To maximize profits
b. To pay dividends to stockholders
c. To provide a benefit to society
d. To manufacture a quality product
ANSWER: a
24. Which of the following businesses buys products from other businesses wholesale to sell them to customers at a retail
price?
a. A merchandising business
b. A manufacturing business
c. A service business
d. An investment business
ANSWER: a
25. Which of the following is not considered a common form of business organization?
a. Sole proprietorship
b. Limited liability company
c. Cooperative trust
d. Corporation
ANSWER: c
26. Which of the following types of organizational forms is popular for its ease of formation and low cost of organizing?
a. Not-for-profit
b. Corporation
c. Partnership
d. Proprietorship
ANSWER: d
27. Which of the following is a characteristic of a limited liability company (LLC)?
a. It issues stock to raise capital.
b. It is taxed at the corporate level.
c. It provides limited liability while allowing pass-through taxation.
d. It has an unlimited life like a corporation.
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
28. Which business strategy involves offering products with unique features that justify higher prices?
a. Premium-price approach
b. Cost minimization strategy
c. Bulk pricing approach
d. Value-based budgeting
ANSWER: a
29. Which of the following is not a characteristic of a corporation?
a. It is a separate legal entity from its owners.
b. Ownership is divided into transferable shares of stock.
c. It pays taxes on its income at the corporate level.
d. It automatically terminates upon the death of a shareholder.
ANSWER: d
30. Which of the following best describes a corporation?
a. A legal entity separate from its owners, with ownership divided into shares of stock
b. A business that is easiest to form and has minimal regulatory requirements
c. A pass-through entity where profits are taxed only on the owners’ tax returns
d. A business that must dissolve upon the withdrawal of an owner
ANSWER: a
31. A low-cost approach strives to provide
a. no-frills, standardized products and services.
b. products and services that provide unique market needs.
c. products and services that provide prestige and image for customers.
d. products and services that compete on features other than price.
ANSWER: a
32. Which of the following businesses uses a premium-price approach?
a. IKEA selling affordable, self-assembled furniture
b. Walmart offering a wide range of low-cost products
c. Apple selling innovative electronics with a strong brand image
d. Spirit Airlines providing no-frills, budget travel options
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
33. Which of the following businesses best represents a low-cost strategy?
a. Delta Airlines offering premium seating and services
b. Tesla offering high-end electric vehicles
c. Dollar Tree providing basic products at a fixed price
d. Nordstrom selling luxury apparel and accessories
ANSWER: c
34. Which of the following is considered a business stakeholder?
a. A bank
b. An employee
c. A federal government
d. All of these
ANSWER: d
35. Which are an example of internal stakeholders?
a. Managers
b. Creditors
c. Stockholders
d. Suppliers
ANSWER: a
36. Which of the following is not an example of a capital market stakeholder?
a. Banks
b. Owners
c. Suppliers
d. Stockholders
ANSWER: c
37. Capital market stakeholders have an interest in a company because
a. they collect taxes from the company.
b. they depend upon the continued success of the company for keeping their jobs.
c. they purchase the company's products or services or sell their products or services to the company.
d. they provide major financing for the business.
ANSWER: d
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
38. In the case of a failing company, the right to the first claim of the company's assets belongs to
a. the state governments.
b. the creditors of the company.
c. the owners of the company.
d. the managers of the company.
ANSWER: b
39. The economic performance of a business is of importance to the government because
a. of potential tax collections.
b. the government sells its products to the business.
c. of the amount owed by the government to the business.
d. all of these.
ANSWER: a
40. The performance evaluation of the managers of a company is dependent on the company's
a. common stock.
b. volatility.
c. economic performance.
d. nonrecurring activities.
ANSWER: c
41. When a business borrows money, which of the following is incurred?
a. An accumulated depletion
b. A liability
c. A loss
d. An accrued expenditure
ANSWER: b
42. Revenues received from providing services are referred to as
a. fees earned.
b. net income.
c. gross income.
d. retained earnings.
ANSWER: a
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, Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
43. A note payable requires payment of the amount borrowed plus
a. interest.
b. tax.
c. overhead.
d. dividend.
ANSWER: a
44. Shares of ownership are evidenced by issuing
a. shares payable.
b. commercial paper.
c. shares of stock.
d. notes payable.
ANSWER: c
45. The resources a business owns are called
a. assets.
b. liabilities.
c. earnings.
d. stockholders' equity.
ANSWER: a
46. A new company issues shares of stock to raise funds, then uses a portion of those funds to purchase a building for its
operations. These actions represent which two types of business activities, respectively?
a. Operating and investing
b. Financing and investing
c. Investing and operating
d. Financing and operating
ANSWER: b
47. Which of the following is an intangible asset?
a. Copyright
b. Cash
c. Land
d. Equipment
ANSWER: a
Copyright Cengage Learning. Powered by Cognero. Page 8
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
Contact Email:
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
1. The objective of most businesses is to maximize profits.
a. True
b. False
ANSWER: True
2. A limited liability company combines attributes of a partnership and a corporation.
a. True
b. False
ANSWER: True
3. A partnership is owned by two or more individuals.
a. True
b. False
ANSWER: True
4. Manufacturing businesses change basic inputs into products that are sold to individual customers.
a. True
b. False
ANSWER: True
5. Merchandising businesses produce products rather than provide services to customers.
a. True
b. False
ANSWER: False
6. A corporation is a business that is legally separate and distinct from its owners.
a. True
b. False
ANSWER: True
7. The popularity of the sole proprietorship is due to the ease and low cost of organizing.
a. True
b. False
ANSWER: True
8. A primary disadvantage of corporations is that the financial resources available to them are limited.
a. True
b. False
ANSWER: False
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
9. The ownership of a proprietorship is divided into shares of stock owned by its stockholders.
a. True
b. False
ANSWER: False
10. All merchandising businesses are organized as corporations.
a. True
b. False
ANSWER: False
11. Stockholders of a corporation are its internal stakeholders.
a. True
b. False
ANSWER: False
12. John Deere is a leading manufacturer of agricultural machinery in the world, producing products that serve unique
market needs. Therefore, John Deere is an example of a company that uses a premium-price approach to attract
customers.
a. True
b. False
ANSWER: True
13. A business stakeholder has an interest in the economic performance of a company.
a. True
b. False
ANSWER: True
14. Companies using a low-cost emphasis provide products and services that compete on features other than price.
a. True
b. False
ANSWER: False
15. The basic type of stock issued to owners is called common stock.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
16. Assets are acquired through investing activities when resources are purchased.
a. True
b. False
ANSWER: True
17. Creditors have preference to assets over stockholders if a business fails.
a. True
b. False
ANSWER: False
18. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing agreement.
a. True
b. False
ANSWER: True
19. Accounting is often called the "language of business" because business information is communicated to stakeholders.
a. True
b. False
ANSWER: True
20. The branch of accounting related to the management's financial decisions is known as financial accounting.
a. True
b. False
ANSWER: False
21. The stockholders' equity of a company should equal the sum of its total assets and total liabilities.
a. True
b. False
ANSWER: False
22. The balance sheet represents the accounting equation.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
23. What is the primary objective of most businesses?
a. To maximize profits
b. To pay dividends to stockholders
c. To provide a benefit to society
d. To manufacture a quality product
ANSWER: a
24. Which of the following businesses buys products from other businesses wholesale to sell them to customers at a retail
price?
a. A merchandising business
b. A manufacturing business
c. A service business
d. An investment business
ANSWER: a
25. Which of the following is not considered a common form of business organization?
a. Sole proprietorship
b. Limited liability company
c. Cooperative trust
d. Corporation
ANSWER: c
26. Which of the following types of organizational forms is popular for its ease of formation and low cost of organizing?
a. Not-for-profit
b. Corporation
c. Partnership
d. Proprietorship
ANSWER: d
27. Which of the following is a characteristic of a limited liability company (LLC)?
a. It issues stock to raise capital.
b. It is taxed at the corporate level.
c. It provides limited liability while allowing pass-through taxation.
d. It has an unlimited life like a corporation.
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
28. Which business strategy involves offering products with unique features that justify higher prices?
a. Premium-price approach
b. Cost minimization strategy
c. Bulk pricing approach
d. Value-based budgeting
ANSWER: a
29. Which of the following is not a characteristic of a corporation?
a. It is a separate legal entity from its owners.
b. Ownership is divided into transferable shares of stock.
c. It pays taxes on its income at the corporate level.
d. It automatically terminates upon the death of a shareholder.
ANSWER: d
30. Which of the following best describes a corporation?
a. A legal entity separate from its owners, with ownership divided into shares of stock
b. A business that is easiest to form and has minimal regulatory requirements
c. A pass-through entity where profits are taxed only on the owners’ tax returns
d. A business that must dissolve upon the withdrawal of an owner
ANSWER: a
31. A low-cost approach strives to provide
a. no-frills, standardized products and services.
b. products and services that provide unique market needs.
c. products and services that provide prestige and image for customers.
d. products and services that compete on features other than price.
ANSWER: a
32. Which of the following businesses uses a premium-price approach?
a. IKEA selling affordable, self-assembled furniture
b. Walmart offering a wide range of low-cost products
c. Apple selling innovative electronics with a strong brand image
d. Spirit Airlines providing no-frills, budget travel options
ANSWER: c
Copyright Cengage Learning. Powered by Cognero. Page 5
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
33. Which of the following businesses best represents a low-cost strategy?
a. Delta Airlines offering premium seating and services
b. Tesla offering high-end electric vehicles
c. Dollar Tree providing basic products at a fixed price
d. Nordstrom selling luxury apparel and accessories
ANSWER: c
34. Which of the following is considered a business stakeholder?
a. A bank
b. An employee
c. A federal government
d. All of these
ANSWER: d
35. Which are an example of internal stakeholders?
a. Managers
b. Creditors
c. Stockholders
d. Suppliers
ANSWER: a
36. Which of the following is not an example of a capital market stakeholder?
a. Banks
b. Owners
c. Suppliers
d. Stockholders
ANSWER: c
37. Capital market stakeholders have an interest in a company because
a. they collect taxes from the company.
b. they depend upon the continued success of the company for keeping their jobs.
c. they purchase the company's products or services or sell their products or services to the company.
d. they provide major financing for the business.
ANSWER: d
Copyright Cengage Learning. Powered by Cognero. Page 6
,Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
38. In the case of a failing company, the right to the first claim of the company's assets belongs to
a. the state governments.
b. the creditors of the company.
c. the owners of the company.
d. the managers of the company.
ANSWER: b
39. The economic performance of a business is of importance to the government because
a. of potential tax collections.
b. the government sells its products to the business.
c. of the amount owed by the government to the business.
d. all of these.
ANSWER: a
40. The performance evaluation of the managers of a company is dependent on the company's
a. common stock.
b. volatility.
c. economic performance.
d. nonrecurring activities.
ANSWER: c
41. When a business borrows money, which of the following is incurred?
a. An accumulated depletion
b. A liability
c. A loss
d. An accrued expenditure
ANSWER: b
42. Revenues received from providing services are referred to as
a. fees earned.
b. net income.
c. gross income.
d. retained earnings.
ANSWER: a
Copyright Cengage Learning. Powered by Cognero. Page 7
, Name: Class: Date:
Chapter_1_The_Role_of_Accounting_in_Business
43. A note payable requires payment of the amount borrowed plus
a. interest.
b. tax.
c. overhead.
d. dividend.
ANSWER: a
44. Shares of ownership are evidenced by issuing
a. shares payable.
b. commercial paper.
c. shares of stock.
d. notes payable.
ANSWER: c
45. The resources a business owns are called
a. assets.
b. liabilities.
c. earnings.
d. stockholders' equity.
ANSWER: a
46. A new company issues shares of stock to raise funds, then uses a portion of those funds to purchase a building for its
operations. These actions represent which two types of business activities, respectively?
a. Operating and investing
b. Financing and investing
c. Investing and operating
d. Financing and operating
ANSWER: b
47. Which of the following is an intangible asset?
a. Copyright
b. Cash
c. Land
d. Equipment
ANSWER: a
Copyright Cengage Learning. Powered by Cognero. Page 8
