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Test Bank For Financial Accounting Fundamentals, 8th Edition By John Wild
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Test Bank For Financial Accounting Fundamentals, 8th Edition By John Wild
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Test Bank For Financial Accounting Fundamentals, 8th Edition By John Wild Chapter 1 -13 Answers are at the End of Each Chapter Chapter 01: Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Accountin g is an information and measurement system that identifies, records, and communicates an organization's business activities. ⊚ true ⊚ false 2) Accounting includes the analysis and interpretation of information. ⊚ true ⊚ false 3) Financial accounting focuses on the nee ds of external users, who get accounting information from general -purpose financial statements. ⊚ true ⊚ false 4) Internal users of accounting information do not directly manage the organization and have limited access to its accounting information. ⊚ true ⊚ false 5) Auditors verify the effectiveness of internal controls. ⊚ true ⊚ false 6) External auditors examine financial statements to verify that they are prepared according to generally accepted accounting principles. ⊚ true ⊚ false 7) External users include lenders, sharehold ers, customers, and regulators. ⊚ true ⊚ false NURSEDOCS 8) Internal users include lenders, shareholders, brokers and nonexecutive employees. ⊚ true ⊚ false 9) Opportunities in accounting include auditing, consulting, market research, and tax planning. ⊚ true ⊚ false 10) The fraud tri angle shows that three factors that push a person to commit fraud are opportunity, pressure, and rationalization. ⊚ true ⊚ false 11) Internal controls are procedures to protect assets, ensure reliable accounting, promote efficiency, and uphold company policies. ⊚ true ⊚ false 12) A partnership is a business owned by two or more people. ⊚ true ⊚ false 13) Owners of a corporation are called shareholders or stockholders. ⊚ true ⊚ false 14) In a partnership, the owners are called stockholders. ⊚ true ⊚ false 15) The balance sheet shows a company 's net income or loss over a period of time. ⊚ true ⊚ false 16) The Financial Accounting Standards Board (FASB) is given the task of setting generally accepted accounting principles (GAAP) from the Securities and Exchange Commission. ⊚ true ⊚ false NURSEDOCS 17) The business enti ty assumption means that accounting information presumes that the business will continue operating instead of being closed or sold. ⊚ true ⊚ false 18) GAAP wants information to have relevance and faithful representation. ⊚ true ⊚ false 19) The business entity assumption means that a business is accounted for separately from other business entities and its owner(s). ⊚ true ⊚ false 20) Revenues should not be recognized in the accounting records when earned, but rather when cash is received. ⊚ true ⊚ false 21) Specific accounting princip les are basic assumptions, concepts, and guidelines for preparing financial statements and arise out of long -used accounting practice. ⊚ true ⊚ false 22) A sole proprietorship is a business with multiple owners. ⊚ true ⊚ false 23) Unlimited liability and separate taxati on of the business are advantages of a sole proprietorship. ⊚ true ⊚ false 24) Objectives, qualitative characteristics, elements, and recognition and measurement are components of the FASB conceptual framework. ⊚ true ⊚ false NURSEDOCS 25) Objectivity means that information is su pported by independent, unbiased evidence. ⊚ true ⊚ false 26) The going -concern assumption presumes that a business will continue operating instead of being closed or sold. ⊚ true ⊚ false 27) The measurement principle prescribes that accounting information is based on s ubjective opinion rather than cost. ⊚ true ⊚ false 28) The monetary unit assumption means that companies should express transactions and events in terms such as “a lot” or “very little ”. ⊚ true ⊚ false 29) The International Accounting Standards Board (IASB) issues Inter national Financial Reporting Standards (IFRS) that identify preferred accounting practices. ⊚ true ⊚ false 30) A limited liability company (LLC) offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation. ⊚ true ⊚ false 31) A limited liability company (LLC) offers the limited liability of a corporation and the tax treatment of a partnership or proprietorship. ⊚ true ⊚ false 32) The Securities and Exchange Commission (SEC) is a U.S. government agency that oversees proper use of GAAP by companies that sell stock and debt to the public. ⊚ true ⊚ false NURSEDOCSThe benefits of buying summaries with Stuvia:
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