,ACCESS Test Bank for Financial Accounting 11th Edition Libby
f f f f f f f f
Financial Accounting Edition 11 by Libby
f f f f f
CORRECT ANSWERS ARE LOCATED IN THE 2ND HALF OF THIS DOC.
f f f f f f f f f f
TRUE/FALSEf-fWritef'T'fiffthefstatementfisftruefandf'F'fiffthefstatementfisffalse.
1) Afbusinessfentity'sfaccountingfsystemfcreatesffinancialfaccountingfreportsfwhichfarefpr
ovidedftofexternalfdecisionfmakers.
⊚f true
⊚f false
2) Businessfmanagersfutilizefinternalfmanagementfreportsftofplanfandfmanagefthefdailyfop
erations.
⊚f true
⊚f false
3) Borrowingfmoneyfisfanfinvestingfactivity.
⊚f true
⊚f false
4) Thefbalancefsheetfincludesfassets,fliabilities,fandfstockholders'fequityfatfafpointfinftime.
⊚f true
⊚f false
5) Revenuefisfrecognizedfwithinfthefincomefstatementfduringfthefperiodfinfwhichfcashfisfcol
lected.
⊚f true
⊚f false
6) Totalfassetsfaref$37,500,ftotalfliabilitiesfaref$20,000fandfcommonfstockfisf$10,000;ftherefore,fret
ainedfearningsfaref$7,500.
⊚f true
⊚f false
7) Forfthefcurrentfyear,fnetfincomefoffCarolfCompanyfisf$20,000fandfdividendsfdeclaredfare
$6,000;ftherefore,fretainedfearningsfhavefincreasedf$26,000fduringfthefyear.
⊚f true
⊚f false
8) Thefincomefstatementfisfafmeasurefoffanfentity'sfeconomicfperformancefforfafperiodfofftime.
⊚f true
⊚f false
Versionf1 1
mynursytest.store
,ACCESS Test Bank for Financial Accounting 11th Edition Libby
f f f f f f f f
Financial Accounting Edition 11 by Libby
f f f f f
9) ThefaccountingfequationfstatesfthatfAssetsf=fLiabilitiesf+fStockholders'fEquity.
⊚f true
⊚f false
10) Afdecisionfmakerfwhofwantsftofunderstandfafcompany'sffinancialfstatementsfmustfcarefullyfrea
dfthefnotesftoftheffinancialfstatementsfbecausefthesefdisclosuresfprovidefusefulfsupplementalfin
formation.
⊚f true
⊚f false
11) Thefbalancefsheetfshowsfwhatfthefcompanyfownsfandfwhatfthefcompanyfowesftofcreditorsfandf
owners.
⊚f true
⊚f false
12) Stockholders'fequityfonfthefbalancefsheetfincludesfcommonfstockfandfretainedfearnings.
⊚f true
⊚f false
13) Thefamountfoffcashfpaidfbyfafbusinessfforfdividendsfwouldfbefreportedfasfanfoperatingfacti
vityfcashfflowfonfthefstatementfoffcashfflows.
⊚f true
⊚f false
14) Afcompany'sfretainedfearningsfbalancefincreasedf$50,000flastfyear;ftherefore,fnetfincomeflastfye
arfmustfhavefbeenf$50,000.
⊚f true
⊚f false
15) Dueftofthefrelationshipsfamongffinancialfstatements,fthefstatementfoffstockholders'fequityflin
ksfthefincomefstatementftofthefbalancefsheet.
⊚f true
⊚f false
16) Thefstatementfoffstockholders'fequityfexplainsfthefchangefinfthefretainedfearningsfbalancefca
usedfbyfstockholderfinvestmentsfandfdividendfdeclarations.
⊚f true
⊚f false
Versionf1 2
mynursytest.store
, ACCESS Test Bank for Financial Accounting 11th Edition Libby
f f f f f f f f
Financial Accounting Edition 11 by Libby
f f f f f
17) ThefFinancialfAccountingfStandardsfBoardf(FASB)fhasfbeenfgivenfthefauthorityfbyfthefSe
curitiesfandfExchangefCommissionf(SEC)ftofdevelopfgenerallyfacceptedfaccountingfprinc
iples.
⊚f true
⊚f false
18) IffafU.S.fdomesticfcompanyfdoesfbusinessfinfafforeignfcountry,fthefSecuritiesfandfExchangefCo
mmissionf(SEC)frequiresfthefusefoffInternationalfFinancialfReportingfStandardsf(IFRS)fforfthef
company'sffinancialfreportingfinfthefU.S.
⊚f true
⊚f false
19) InfthefUnitedfStates,fgenerallyfacceptedfaccountingfprinciplesfarefpublishedfinfthefFASBfAc
countingfStandardsfCodification.
⊚f true
⊚f false
20) Thefprimaryfresponsibilityfforfthefcontentfofftheffinancialfstatementsfliesfwithfthefexternalfaud
itor.
⊚f true
⊚f false
21) Anfauditfisfanfexaminationfofftheffinancialfstatementsftofensurefthatftheyfrepresentfwhatftheyfclai
mfandftofmakefsurefthatftheyfarefinfcompliancefwithfgenerallyfacceptedfaccountingfprinciples.
⊚f true
⊚f false
22) Auditorsfcanfbefheldflegallyfliablefforffraudulentffinancialfstatements.
⊚f true
⊚f false
23) Onefoffthefadvantagesfoffafcorporationfwhenfcomparedftofafpartnershipfisftheflimitedfliabilityfofft
hefowners.
⊚f true
⊚f false
Versionf1 3
mynursytest.store
f f f f f f f f
Financial Accounting Edition 11 by Libby
f f f f f
CORRECT ANSWERS ARE LOCATED IN THE 2ND HALF OF THIS DOC.
f f f f f f f f f f
TRUE/FALSEf-fWritef'T'fiffthefstatementfisftruefandf'F'fiffthefstatementfisffalse.
1) Afbusinessfentity'sfaccountingfsystemfcreatesffinancialfaccountingfreportsfwhichfarefpr
ovidedftofexternalfdecisionfmakers.
⊚f true
⊚f false
2) Businessfmanagersfutilizefinternalfmanagementfreportsftofplanfandfmanagefthefdailyfop
erations.
⊚f true
⊚f false
3) Borrowingfmoneyfisfanfinvestingfactivity.
⊚f true
⊚f false
4) Thefbalancefsheetfincludesfassets,fliabilities,fandfstockholders'fequityfatfafpointfinftime.
⊚f true
⊚f false
5) Revenuefisfrecognizedfwithinfthefincomefstatementfduringfthefperiodfinfwhichfcashfisfcol
lected.
⊚f true
⊚f false
6) Totalfassetsfaref$37,500,ftotalfliabilitiesfaref$20,000fandfcommonfstockfisf$10,000;ftherefore,fret
ainedfearningsfaref$7,500.
⊚f true
⊚f false
7) Forfthefcurrentfyear,fnetfincomefoffCarolfCompanyfisf$20,000fandfdividendsfdeclaredfare
$6,000;ftherefore,fretainedfearningsfhavefincreasedf$26,000fduringfthefyear.
⊚f true
⊚f false
8) Thefincomefstatementfisfafmeasurefoffanfentity'sfeconomicfperformancefforfafperiodfofftime.
⊚f true
⊚f false
Versionf1 1
mynursytest.store
,ACCESS Test Bank for Financial Accounting 11th Edition Libby
f f f f f f f f
Financial Accounting Edition 11 by Libby
f f f f f
9) ThefaccountingfequationfstatesfthatfAssetsf=fLiabilitiesf+fStockholders'fEquity.
⊚f true
⊚f false
10) Afdecisionfmakerfwhofwantsftofunderstandfafcompany'sffinancialfstatementsfmustfcarefullyfrea
dfthefnotesftoftheffinancialfstatementsfbecausefthesefdisclosuresfprovidefusefulfsupplementalfin
formation.
⊚f true
⊚f false
11) Thefbalancefsheetfshowsfwhatfthefcompanyfownsfandfwhatfthefcompanyfowesftofcreditorsfandf
owners.
⊚f true
⊚f false
12) Stockholders'fequityfonfthefbalancefsheetfincludesfcommonfstockfandfretainedfearnings.
⊚f true
⊚f false
13) Thefamountfoffcashfpaidfbyfafbusinessfforfdividendsfwouldfbefreportedfasfanfoperatingfacti
vityfcashfflowfonfthefstatementfoffcashfflows.
⊚f true
⊚f false
14) Afcompany'sfretainedfearningsfbalancefincreasedf$50,000flastfyear;ftherefore,fnetfincomeflastfye
arfmustfhavefbeenf$50,000.
⊚f true
⊚f false
15) Dueftofthefrelationshipsfamongffinancialfstatements,fthefstatementfoffstockholders'fequityflin
ksfthefincomefstatementftofthefbalancefsheet.
⊚f true
⊚f false
16) Thefstatementfoffstockholders'fequityfexplainsfthefchangefinfthefretainedfearningsfbalancefca
usedfbyfstockholderfinvestmentsfandfdividendfdeclarations.
⊚f true
⊚f false
Versionf1 2
mynursytest.store
, ACCESS Test Bank for Financial Accounting 11th Edition Libby
f f f f f f f f
Financial Accounting Edition 11 by Libby
f f f f f
17) ThefFinancialfAccountingfStandardsfBoardf(FASB)fhasfbeenfgivenfthefauthorityfbyfthefSe
curitiesfandfExchangefCommissionf(SEC)ftofdevelopfgenerallyfacceptedfaccountingfprinc
iples.
⊚f true
⊚f false
18) IffafU.S.fdomesticfcompanyfdoesfbusinessfinfafforeignfcountry,fthefSecuritiesfandfExchangefCo
mmissionf(SEC)frequiresfthefusefoffInternationalfFinancialfReportingfStandardsf(IFRS)fforfthef
company'sffinancialfreportingfinfthefU.S.
⊚f true
⊚f false
19) InfthefUnitedfStates,fgenerallyfacceptedfaccountingfprinciplesfarefpublishedfinfthefFASBfAc
countingfStandardsfCodification.
⊚f true
⊚f false
20) Thefprimaryfresponsibilityfforfthefcontentfofftheffinancialfstatementsfliesfwithfthefexternalfaud
itor.
⊚f true
⊚f false
21) Anfauditfisfanfexaminationfofftheffinancialfstatementsftofensurefthatftheyfrepresentfwhatftheyfclai
mfandftofmakefsurefthatftheyfarefinfcompliancefwithfgenerallyfacceptedfaccountingfprinciples.
⊚f true
⊚f false
22) Auditorsfcanfbefheldflegallyfliablefforffraudulentffinancialfstatements.
⊚f true
⊚f false
23) Onefoffthefadvantagesfoffafcorporationfwhenfcomparedftofafpartnershipfisftheflimitedfliabilityfofft
hefowners.
⊚f true
⊚f false
Versionf1 3
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