Test Bank for Survey of Accounting, 10th Edition by Carl S. Warren
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Course
ACCT331
Institution
ACCT331
Test Bank for Survey of Accounting 10e 10th Edition by Carl S. Warren, Amanda Farmer, Jefferson P. Jones. Full Chapters test bank are included - Chapter 1 to 14
1. The Role of Accounting in Business
2. Basic Accounting Systems: Cash Basis.
3. Basic Accounting Systems: Accrual Basis.
4. Accoun...
Test Bank for Survey of Accounting , 10th Edition Warren
Chap 01 10e Warren
Indicate whether the statement is true or false.
1. The popularity of the sole proprietorship is due to the ease and low cost of organizing.
a. True
b. False
ANSWER: True
2. A corporation is a business that is legally separate and distinct from its owners.
a. True
b. False
ANSWER: True
3. Merchandising businesses produce products rather than provide services to customers.
a. True
b. False
ANSWER: False
4. A partnership is owned by two or more individuals.
a. True
b. False
ANSWER: True
5. A limited liability company combines attributes of a partnership and a corporation.
a. True
b. False
ANSWER: True
6. The ownership of a proprietorship is divided into shares of stock owned by its stockholders.
a. True
b. False
ANSWER: False
7. Accounting is often called the "language of business" because business information is communicated to
stakeholders.
a. True
b. False
ANSWER: True
Page 1
,Name: Class: Date:
Chap 01 10e Warren
8. John Deere is a leading manufacturer of agricultural machinery in the world, producing products that serve
unique market needs. Therefore, John Deere is an example of a company that uses a premium-price approach
to attract customers.
a. True
b. False
ANSWER: True
9. Creditors have preference to assets behind stockholders if a business fails.
a. True
b. False
ANSWER: False
10. A liability is a legal obligation to repay the amount borrowed according to the terms of the borrowing agreement.
a. True
b. False
ANSWER: True
11. The balance sheet represents the accounting equation.
a. True
b. False
ANSWER: True
12. A primary disadvantage of corporations is that the financial resources available to them are limited.
a. True
b. False
ANSWER: False
13. Assets are acquired through investing activities when resources are purchased.
a. True
b. False
ANSWER: True
14. The objective of most businesses is to maximize profits.
a. True
b. False
ANSWER: True
Page 2
,Name: Class: Date:
Chap 01 10e Warren
15. The stockholders' equity of a company should equal the sum of its total assets and total liabilities.
a. True
b. False
ANSWER: False
16. The branch of accounting related to the management's financial decisions is known as financial accounting.
a. True
b. False
ANSWER: False
17. All merchandising businesses are organized as corporations.
a. True
b. False
ANSWER: False
18. Stockholders of a corporation are its internal stakeholders.
a. True
b. False
ANSWER: False
19. The basic type of stock issued to owners is called common stock.
a. True
b. False
ANSWER: True
20. A business stakeholder has an interest in the economic performance of a company.
a. True
b. False
ANSWER: True
21. Manufacturing businesses change basic inputs into products that are sold to individual customers.
a. True
b. False
ANSWER: True
22. Companies using a low-cost emphasis provide products and services that compete on features other than price.
a. True
b. False
ANSWER: False
Page 3
, Name: Class: Date:
Chap 01 10e Warren
Indicate the answer choice that best completes the statement or answers the question.
23. When a business borrows money, which of the following is incurred?
a. An accumulated depletion
b. A liability
c. A loss
d. An accrued expenditure
ANSWER: b
24. What is the primary objective of most businesses?
a. To maximize profits
b. To pay dividends to stockholders
c. To provide a benefit to society
d. To manufacture a quality product
ANSWER: a
25. A note payable requires payment of the amount borrowed plus _____.
a. interest
b. tax
c. overhead
d. dividend
ANSWER: a
26. If there are no beginning retained earnings, net income of $31,200, and ending retained earnings of $9,000, how
much are dividends?
a. $40,200
b. $9,000
c. $22,200
d. $4,500
ANSWER: c
27. Which of the following is not an example of a capital market stakeholder?
a. Banks
b. Owners
c. Suppliers
d. Stockholders
ANSWER: c
Page 4
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