Solutions and Test Bank For Fundamental Accounting Principles, Volume 1, 17th Edition By Kermit Larson
Solutions and Test Bank for Fundamental
Accounting Principles, Volume 1, 17th Edition by
Kermit Larson
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Accounting is an information system that identifies, measures, records and communicates
relevant information that objectively and correctly represents an organization's economic
activities.
⊚ true
⊚ false
2) Accounting information helps people make better decisions about the performance of a
business.
⊚ true
⊚ false
3) The main objective of accounting is to help people to invest in new products and
businesses.
⊚ true
⊚ false
4) Recordkeeping" is another term for "accounting".
⊚ true
⊚ false
,Solutions and Test Bank For Fundamental Accounting Principles, Volume 1, 17th Edition By Kermit Larson
5) A sole proprietorship is a business owned by one or more persons.
⊚ true
⊚ false
6) A partnership requires no special legal requirements to start, other than to register the
business name and obtain a business license.
⊚ true
⊚ false
7) Ownership of a corporation is divided into units called shares.
⊚ true
⊚ false
8) In the partnership form of business, the owners of a business are called shareholders.
⊚ true
⊚ false
9) Unlimited liability is an advantage for both a proprietorship and a partnership.
⊚ true
⊚ false
,Solutions and Test Bank For Fundamental Accounting Principles, Volume 1, 17th Edition By Kermit Larson
10) Although a proprietorship is not a separate legal entity, a partnership is.
⊚ true
⊚ false
11) A corporation is responsible for its actions and any debts incurred. It can enter into its
own contracts, and it can buy, own, and sell property.
⊚ true
⊚ false
12) Non-business organizations often operate educational and religious services for profit.
⊚ true
⊚ false
13) Sole proprietorships and partnerships are not subject to income tax in Canada.
⊚ true
⊚ false
14) External users include lenders such as banks, and other creditors such as suppliers and
bondholders.
⊚ true
⊚ false
15) Internal users include creditors, shareholders, internal auditors, and managers.
, Solutions and Test Bank For Fundamental Accounting Principles, Volume 1, 17th Edition By Kermit Larson
⊚ true
⊚ false
16) Managerial accounting provides special-purpose reports customized to meet the
information needs of internal users.
⊚ true
⊚ false
17) Internal operating functions include research and development, distribution, and human
resources.
⊚ true
⊚ false
18) Internal controls include procedures to protect assets and prevent fraud.
⊚ true
⊚ false
18.1) Career opportunities in accounting include auditing, forensic accounting, and tax
planning.
⊚ true
⊚ false
19) Budgeting is the process of developing formal plans for an organization's future
activities.
Solutions and Test Bank for Fundamental
Accounting Principles, Volume 1, 17th Edition by
Kermit Larson
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Accounting is an information system that identifies, measures, records and communicates
relevant information that objectively and correctly represents an organization's economic
activities.
⊚ true
⊚ false
2) Accounting information helps people make better decisions about the performance of a
business.
⊚ true
⊚ false
3) The main objective of accounting is to help people to invest in new products and
businesses.
⊚ true
⊚ false
4) Recordkeeping" is another term for "accounting".
⊚ true
⊚ false
,Solutions and Test Bank For Fundamental Accounting Principles, Volume 1, 17th Edition By Kermit Larson
5) A sole proprietorship is a business owned by one or more persons.
⊚ true
⊚ false
6) A partnership requires no special legal requirements to start, other than to register the
business name and obtain a business license.
⊚ true
⊚ false
7) Ownership of a corporation is divided into units called shares.
⊚ true
⊚ false
8) In the partnership form of business, the owners of a business are called shareholders.
⊚ true
⊚ false
9) Unlimited liability is an advantage for both a proprietorship and a partnership.
⊚ true
⊚ false
,Solutions and Test Bank For Fundamental Accounting Principles, Volume 1, 17th Edition By Kermit Larson
10) Although a proprietorship is not a separate legal entity, a partnership is.
⊚ true
⊚ false
11) A corporation is responsible for its actions and any debts incurred. It can enter into its
own contracts, and it can buy, own, and sell property.
⊚ true
⊚ false
12) Non-business organizations often operate educational and religious services for profit.
⊚ true
⊚ false
13) Sole proprietorships and partnerships are not subject to income tax in Canada.
⊚ true
⊚ false
14) External users include lenders such as banks, and other creditors such as suppliers and
bondholders.
⊚ true
⊚ false
15) Internal users include creditors, shareholders, internal auditors, and managers.
, Solutions and Test Bank For Fundamental Accounting Principles, Volume 1, 17th Edition By Kermit Larson
⊚ true
⊚ false
16) Managerial accounting provides special-purpose reports customized to meet the
information needs of internal users.
⊚ true
⊚ false
17) Internal operating functions include research and development, distribution, and human
resources.
⊚ true
⊚ false
18) Internal controls include procedures to protect assets and prevent fraud.
⊚ true
⊚ false
18.1) Career opportunities in accounting include auditing, forensic accounting, and tax
planning.
⊚ true
⊚ false
19) Budgeting is the process of developing formal plans for an organization's future
activities.
