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Accounting Ch. 1-4 Test Bank Exam 2024/2025 Questions With Completed & Verified Solutions.
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Accounting Ch. 1-4 Test Bank Exam 2024/2025 Questions With Completed & Verified Solutions.
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Accounting Ch. 1-4 Test BankT or F,
Owners of business firms are the only people who need accounting information - ANS F
T or F
Transactions that can be measured in dollars and cents are recorded in the financial information
system - ANS T
T or F
The hiring of a new company president is an economic event recorded by the financial
information system - ANS F
T or F
Management of a business enterprise is the major external user of information - ANS F
T or F
Accounting communicates financial information about a business enterprise to both internal and
external users - ANS T
T or F
Accounting information is used only by external users with a financial interest in a business
enterprise - ANS F
T or F
Financial statements are the major means of communicating accounting information to
interested parties - ANS T
T or F
Bookkeeping and accounting are one and the same because the bookkeeping function includes
the accounting process - ANS F
T or F
The origins of accounting are attributed to Luca Pacioli, a famous mathematician - ANS T
T or F
The State Administration of Taxation in the People's Republic of China is an example of an
internal user of accounting informa - ANS F
T or F
The German Confederation of Trade Union is an example of an external user of accounting
information - ANS T
, T or F
Accountants rely on a fundamental business concept - ethical behaviour - in reporting financial
information - ANS T
T or F
The process of reducing the differences between GAAP and IFRS is known as convergence -
ANS T
T or F
Even though a partnership is not a separate legal entity, for accounting purposes the partnership
affairs should be kept separate from the personal activities of the owner - ANS T
T or F
The economic entity assumption requires that the activities of an entity be kept separate and
distinct from the activities of its owner and all other economic entities - ANS T
T or F
The monetary unit assumption states that transactions that can be measured in terms of money
should be recorded in the accounting records - ANS T
T or F
In order to possess future service potential, an asset must have physical substance - ANS F
T or F
Owners' claims to total business assets take precedence over the claims of credits because
owners invest assets in the business and are liable for losses. - ANS F
T or F
The basic accounting equation states that Assets = Liabilities - ANS F
T or F
Share capital is the total amount paid in by shareholders for shares purchased - ANS T
T or F
The principal source of equity is amounts paid in by shareholders - ANS F
T or F
Expenses are increases in equity that result from operating the business - ANS F
T or F
The two components of equity are retained earnings and share capital - ANS T
T or F
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