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Financial Accounting The Cornerstone of Business Decisions International Edition 2nd Edition by Jay Rich - Test Bank $26.56
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Financial Accounting The Cornerstone of Business Decisions International Edition 2nd Edition by Jay Rich - Test Bank
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Financial Accounting The Cornerstone of Business Decisions International Edition 2nd Edition by Jay Rich - Test Bank

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  • January 2, 2024
  • 799
  • 2021/2022
  • Exam (elaborations)
  • Questions & answers

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  • complete test bank
  • 2nd edition
  • by jay rich
  • financial accounting the cornerstone of business d
  • test bank

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  • Financial Accounting
  • Financial Accounting
  • Financial Accounting
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,Chapter 1—Accounting and the Financial Statements


TRUE/FALSE

1. There are more corporations than sole proprietorships and partnerships in the United States.

ANS: F PTS: 1 DIF: Easy OBJ: 1-1
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose

2. The three main business activities are financing, operating, and investing.

ANS: T PTS: 1 DIF: Easy OBJ: 1-2
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-03-Business Forms

3. Internal users of accounting information include present creditors and management.

ANS: F PTS: 1 DIF: Easy OBJ: 1-1
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose

4. The income statement summarizes the assets, liabilities and stockholders’ equity for a period of time.

ANS: F PTS: 1 DIF: Easy OBJ: 1-3
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

5. The four basic financial statements are the Income Statement, Statement of Retained Earnings,
Balance Sheet, and Statement of Cash Flows.

ANS: T PTS: 1 DIF: Easy OBJ: 1-3
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

6. The amount of earnings distributed to stockholders can be found in the income statement as an
expense.

ANS: F PTS: 1 DIF: Moderate OBJ: 1-5 | 1-6
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

7. Stockholders' equity is composed of two main sources: liabilities and contributed capital.

ANS: F PTS: 1 DIF: Easy REF: CS1-2
OBJ: 1-4
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

8. The first step in preparing the classified balance sheet is to list the assets in order of liquidity.



© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

,ANS: F PTS: 1 DIF: Moderate REF: CS1-2
OBJ: 1-4
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement




© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

, 9. The only financial statement that reports the retained earnings balance at the end of the period is the
Statement of Retained Earnings.

ANS: F PTS: 1 DIF: Moderate OBJ: 1-4 | 1-6
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

10. An income statement provides information at one specific point in time, while the other basic financial
statements provide information on activities that occur over a period of time.

ANS: F PTS: 1 DIF: Moderate OBJ: 1-5
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

11. When an entity's stock issuances exceed its expenses for a period of time, the entity will report net
income.

ANS: F PTS: 1 DIF: Moderate REF: CS1-3
OBJ: 1-5
NAT: AICPA FN-Measurement | AACSB Communication | ACBSP-APC-09-Financial Statement

12. Contributed capital is the residual interest that remains after deducting liabilities from stockholders'
equity.

ANS: F PTS: 1 DIF: Moderate REF: CS1-2
OBJ: 1-4
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

13. The four steps in preparing the Income Statement are: 1) Prepare heading, 2) List the revenues of the
company, 3) List the expenses of the company, 4) List the dividends of the company.

ANS: F PTS: 1 DIF: Moderate REF: CS1-3
OBJ: 1-5
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

14. Stockholders equity is composed of contributed capital and retained earnings.

ANS: T PTS: 1 DIF: Moderate OBJ: 1-4
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

15. The primary objective of internal auditors who are employees of the company is to provide assurance
to the company’s stockholders that the financial statements are fairly presented.

ANS: F PTS: 1 DIF: Easy OBJ: 1-9
NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose



© 2012 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

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