Test Bank for Financial Accounting 7th Canadian Edition by KimmeL

Test Bank for Financial
Accounting 7th Canadian
Edition by Kimmel

,Test Bank for Financial Accounting 7th Canadian Edition by Kimmel




Question type: True/False


1) Accounting identifies and records economic events of a business.

Answer: True

Difficulty: Easy
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: Ethics and Accounting Information
Bloomcode: Knowledge
CPA: Financial Reporting
AACSB: Analytic


2) High standards of ethics are not required for preparers of financial information.

Answer: False

Difficulty: Easy
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: Ethics and Accounting Information
Bloomcode: Comprehension
CPA: Financial Reporting
AACSB: Analytic


3) Accounting information is not important to marketing managers.

Answer: False

Difficulty: Easy
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: Internal Users
Bloomcode: Comprehension
CPA: Financial Reporting
AACSB: Analytic


4) Authorities, such as the Canada Revenue Agency, want to know whether a business complies

,with the tax laws.

Answer: True

Difficulty: Easy
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: External Users
Bloomcode: Knowledge
CPA: Financial Reporting
AACSB: Analytic


5) Accounting communicates financial information about a business to both internal and external
users.

Answer: True

Difficulty: Easy
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: Ethics and Accounting Information
Bloomcode: Knowledge
CPA: Financial Reporting
AACSB: Analytic


6) Two internal users of accounting information are investors and managers.

Answer: False

Difficulty: Easy
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: Internal Users
Bloomcode: Knowledge
CPA: Financial Reporting
AACSB: Analytic


7) Accounting provides financial comparisons of operating alternatives, projections of income
from new sales campaigns, analyses of sales costs, and forecasts of cash needs for external users.

Answer: False

Difficulty: Medium
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: Ethics and Accounting Information
Bloomcode: Comprehension

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CPA: Financial Reporting
AACSB: Analytic
Feedback: Accounting provides financial comparisons of operating alternatives, projections of
income from new sales campaigns, analyses of sales costs, and forecasts of cash needs for
internal users.


8) Companies present summarized financial information in the form of financial statements for
both internal and external use.

Answer: True

Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: Ethics and Accounting Information
Difficulty: Medium
Bloomcode: Comprehension
CPA: Financial Reporting
AACSB: Analytic


9) Anyone who works for a company but does not necessarily have access to accounting
information to assist them in managing and operating the company is still considered to be an
internal user.

Answer: False

Difficulty: Medium
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: Internal Users
Bloomcode: Comprehension
CPA: Financial Reporting
AACSB: Analytic
Feedback: Anyone who works for a company but does not necessarily have access to accounting
information to assist them in managing and operating the company is considered to be an
external user.


10) Potential employees who use annual reports to learn about the company and evaluate job
prospects are regarded as external users.

Answer: True

Difficulty: Medium
Learning Objective 1: Identify the uses and users of accounting information.
Section Reference 1: External Users
Bloomcode: Comprehension