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Fundamentals of Financial Accounting 5Th Canadian Edition By Fred Phillips -Test Bank £17.49
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Fundamentals of Financial Accounting 5Th Canadian Edition By Fred Phillips -Test Bank
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Chapter 01 - Business Decisions and Financial Accounting True / False Questions Chapter 01 Business Decisions and Financial Accounting 1. Building a new warehouse is an operating activity. TRUE Blooms: Understand Accessibility: Keyboard Navigation Difficulty: Easy Learning Objective: 01-02 ...

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  • September 16, 2023
  • 770
  • 2022/2023
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,Chapter 01 - Business Decisions and Financial Accounting


Chapter 01
Business Decisions and Financial Accounting




True / False Questions


1. Building a new warehouse is an operating activity.
TRUE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-15 The Statement of Cash Flows



2. The payment of dividends is a financing activity.
TRUE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-15 The Statement of Cash Flows



3. Daily activities involved in running a business such as buying supplies and paying wages
are operating activities.
TRUE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-15 The Statement of Cash Flows




1-1

,Chapter 01 - Business Decisions and Financial Accounting



4. Financing activities include borrowing and obtaining money by issuing shares of ownership
(called stock certificates).
TRUE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-15 The Statement of Cash Flows



5. Shareholders are creditors of a company.
FALSE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 Describe various organizational forms and business decision makers.
Topic: 01-10 Shareholders' Equity



6. All corporations acquire financing by issuing shares of ownership (called stock certificates)
for sale on public stock exchanges.
FALSE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 Describe various organizational forms and business decision makers.
Topic: 01-04 Corporation



7. You paid $10,000 to buy 1% of the stock in a corporation that has now gone bankrupt. The
company owes $10 million dollars to creditors. As a result of the bankruptcy, you will lose
$100,000.
FALSE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 Describe various organizational forms and business decision makers.
Topic: 01-04 Corporation




1-2

, Chapter 01 - Business Decisions and Financial Accounting



8. The shareholders' equity in a company is the difference between assets and liabilities.
TRUE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-10 Shareholders' Equity



9. A company owes $200,000 on a bank loan. If this loan is documented using a formal
written debt contract, it will be reported as a liability called Notes Payable.
TRUE


Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-09 Liabilities



10. The accounting decisions that were made when preparing a company's financial
statements are explained in the auditor's report.
FALSE


Blooms: Remember
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-04 Describe factors that contribute to useful financial information.
Topic: 01-20 Generally Accepted Accounting Principles



11. Under the unit of measure concept, a Canadian company would report the data on the
financial statements in Canadian dollars.
TRUE


Blooms: Remember
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-20 Generally Accepted Accounting Principles




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