TEST BANK Financial Accounting 6th Edit,ion Chapters 1 – 12 Complete By David Spiceland, Wayne Thomas and Don Herrmann

TEST BANK
Financial Accounting, 6th Edition
Chapters 1 – 12 Complete
By David Spiceland, Wayne Thomas and Don Herrmann

,TABLE OF CONTENTS




Chapter 1: A Framework for Financial Accounting Chapter 2: The

Accounting Cycle: During the Period Chapter 3: The Accounting Cycle:

End of the Period Chapter 4: Cash and Internal Controls

Chapter 5: Receivables and Sales

Chapter 6: Inventory and Cost of Goods Sold Chapter 7: Long-Term

Assets

Chapter 8: Current Liabilities Chapter 9: Long-

Term Liabilities Chapter 10: Stockholders’ Equity

Chapter 11: Statement of Cash Flows

Chapter 12: Financial Statement Analysis

,Chapter 1 A Framework for Financial Accounting

1) Accounting is a system of maintaining records of a company's operations and communicating
that information to decision makers.

Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking

2) Accounting information is used by investors to decide whether to invest in a company's stock.

Answer: TRUE
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking

3) Accounting information is used by creditors to decide whether to invest in a company's stock.

Answer: FALSE
Explanation: Creditors lend money to a company.
Difficulty: 1 Easy
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking

4) The primary functions of financial accounting are to measure business activities of a
company and to communicate those measurements to internal parties for decision-making
purposes.

Answer: FALSE
Explanation: Financial accounting primarily serves to provide information to external parties.
Difficulty: 2 Medium
Topic: Defining Accounting
Learning Objective: 01-01 Describe the two primary functions of financial accounting.Bloom's:
Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking

, 5) FinancingJactivitiesJareJtransactionsJinvolvingJexternalJsourcesJofJfunding.

Answer:JTRUEJ Difficul
ty:J1JEasy
Topic:J MeasuringJBusinessJActivities
LearningJObjective:J 01-
02JUnderstandJtheJbusinessJactivitiesJthatJfinancialJaccountingmeasures.J Bloom's:JJ RememberJAAC
SB:
ReflectiveJThinkingAICPA:J FNJ
Measurement

6) InvestingJactivitiesJincludeJtheJpurchaseJandJsaleJofJlong-termJresources.

Answer:JTRUEJ Difficul
ty:J1JEasy
Topic:J MeasuringJBusinessJActivities
LearningJObjective:J 01-
02JUnderstandJtheJbusinessJactivitiesJthatJfinancialJaccountingmeasures.J Bloom's:JJ RememberJAAC
SB:
ReflectiveJThinkingAICPA:J FNJ
Measurement

7) OperatingJactivitiesJincludeJtransactionsJthatJrelateJtoJtheJprimaryJoperationsJofJtheJcompany.

Answer:JTRUEJ Difficul
ty:J1JEasy
Topic:J MeasuringJBusinessJActivities
LearningJObjective:J 01-
02JUnderstandJtheJbusinessJactivitiesJthatJfinancialJaccountingmeasures.J Bloom's:JJ RememberJAAC
SB:
ReflectiveJThinkingAICPA:J FNJ
Measurement

8) AJcorporationJisJanJentityJthatJisJlegallyJseparateJfromJitsJowners.

Answer:JTRUEJ Difficul
ty:J1JEasy
Topic:J MeasuringJBusinessJActivities
LearningJObjective:J 01-
02JUnderstandJtheJbusinessJactivitiesJthatJfinancialJaccountingmeasures.J Bloom's:JJ RememberJAA
CSB:
ReflectiveJThinkingAICPA:J BBJ
CriticalJThinking