Financial Accounting IFRS 12th Global Edition | Test Bank | C William Thomas & Wendy M. Tietz | 9781292412900

TEST BANK

FINANCIAL ACCOUNTING, IFRS
12TH GLOBAL EDITION

CHAPTER 1: CONCEPTUAL FRAMEWORK AND FINANCIAL STATEMENTS
1.1-1 Bookkeeping is a type of accounting used primarily by proprietorships.


Answer: False
LO: 1-1
Difficulty: 1
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Strategic/Critical Thinking


1.1-2 Bookkeeping is the mechanical part of accounting.


Answer: True
LO: 1-1
Difficulty: 1


AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Strategic/Critical Thinking


1.1-3 The major forms of business organizations are proprietorships, partnerships, and for-profit
organizations.


Answer: False
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry Sector

,1.1-4 Limited Liability Partnerships (LLPs) have at least one general partner with unlimited liability
for all partnership debts.


Answer: True
LO: 1-1
Difficulty: 1
AACSB: Analytical Skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry Sector, Legal/Regulatory


1.1-5 In an LLP, each partner is liable for partnership debts only to the extent of their investment in the
partnership plus their share of the liabilities.


Answer: True
LO: 1-1
Difficulty: 2
AACSB: Analytical Skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry Sector, Legal/Regulatory


1.1-6 All business owners are personally liable for the debts of their businesses.


Answer: False
LO: 1-1
Difficulty: 2
AACSB: Analytical Skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry Sector, Legal/Regulatory


1.1-7 The business records of a proprietorship should include the proprietor’s personal finances.


Answer: False
LO: 1-1

, Difficulty: 1
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry sector, Legal/Regulatory


1.1-8 Mutual agency of a partnership means that each partner may conduct business in the name of the
partnership and can legally bind all the partners without limit for the partnership’s debts.


Answer: True
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry sector, Legal/Regulatory


1.1-9 Financial accounting provides budgeting information to a company’s managers.


Answer: False
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement, Reporting
AICPA Business Perspective Competencies: Industry sector


1.1-10 Managerial accounting information is used mainly by external users.


Answer: False
LO: 1-1
Difficulty: 1
AACSB: Analytical skills
AICPA Functional Competencies: Measurement, Reporting
AICPA Business Perspective Competencies: Industry sector


1.1-11 Accounting:

, A) measures business activities.
B) processes data into reports and communicates the data to decision makers.
C) is often called the language of business.
D) is all of the above.


Answer: D
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Strategic/Critical Thinking


1.1-12 The two types of accounting are:
A) profit and nonprofit.
B) financial and managerial.
C) internal and external.
D) bookkeeping and decision-oriented.


Answer: B
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement, Reporting
AICPA Business Perspective Competencies: Industry sector


1.1-13 Management accounting:
A) includes information such as budgets and forecasts.
B) is used to make strategic decisions for the entity.
C) must be relevant to decision makers within the entity.
D) is all of the above.


Answer: D
LO: 1-1
Difficulty: 2