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Test Bank for Corporate Financial Accounting, 17th Edition by Carl Warren $29.49
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Exam (elaborations)

Test Bank for Corporate Financial Accounting, 17th Edition by Carl Warren
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  • Course
  • Advanced Accounting
  • Institution
  • Advanced Accounting

Test Bank for Corporate Financial Accounting, 17e 17th Edition by Carl Warren, Jeff Jones, William B. Tayler. Complete Chapters (Chapter 1 to 14) are included with answers. 1. Introduction to Accounting and Business. 2. Analyzing Transactions. 3. The Adjusting Process. 4. Completing the Accou...

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  • August 21, 2024
  • 1002
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • Advanced Accounting
  • Advanced Accounting

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Chap 01 17e

Indicate whether the statement is true or false.
1. Revenue is earned only when money is received.
a. True
b. False

ANSWER: False

2. An account receivable is a claim against a customer resulting from a sale on account.
a. True
b. False

ANSWER: True

3. The financial statements of a proprietorship should include the owner's personal assets and liabilities.
a. True
b. False

ANSWER: False

4. Operating activities are those activities by which a company generates revenues from customers.
a. True
b. False

ANSWER: True

5. The Sarbanes-Oxley Act established standards for corporate responsibility and disclosure.
a. True
b. False

ANSWER: True

6. Proper ethical conduct implies that you only consider what's in your best interest.
a. True
b. False

ANSWER: False

7. The main objective for all businesses is to maximize unrealized profits.
a. True
b. False

ANSWER: False




Page 1

,Name: Class: Date:

Chap 01 17e

8. Investing activities are those activities by which the company obtains funds to start and operate the business.
a. True
b. False

ANSWER: False

9. Proprietorships are owned by one owner and provide only services to their customers.
a. True
b. False

ANSWER: False

10. An account receivable is typically classified as a revenue.
a. True
b. False

ANSWER: False

11. Generally accepted accounting principles regulate how and what financial information is reported by businesses.
a. True
b. False

ANSWER: True

12. If a building is appraised for $85,000, offered for sale at $90,000, and the buyer pays $80,000 cash for it, the
buyer would record the building at $85,000.
a. True
b. False

ANSWER: False

13. An example of a general-purpose financial statement would be a report about projected price increases related
to transportation costs used only by internal managers of the organization and not by external users.
a. True
b. False

ANSWER: False

14. The monetary unit assumption requires that economic data be recorded in dollars for companies in the United
States.
a. True
b. False

ANSWER: True




Page 2

,Name: Class: Date:

Chap 01 17e

15. The majority of businesses end their fiscal year on December 31.
a. True
b. False

ANSWER: True

16. The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from
income activities, and cash flows from equity activities.
a. True
b. False

ANSWER: False

17. The cost principle is the basis for entering the purchase price into the accounting records.
a. True
b. False

ANSWER: True

18. An income statement is a summary of the revenues and expenses of a business as of a specific date.
a. True
b. False

ANSWER: False

19. Some of the major fraudulent acts by senior executives started as what they considered to be small ethical
lapses that grew out of control.
a. True
b. False

ANSWER: True

20. About 90% of the businesses in the United States are organized as corporations.
a. True
b. False

ANSWER: False

21. If net income for a company was $50,000, $20,000 in cash dividends were paid, and the shareholders invested
$10,000 in cash, the stockholders' equity increased by $40,000.
a. True
b. False

ANSWER: True




Page 3

, Name: Class: Date:

Chap 01 17e

22. If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the
same period, the period's change in total stockholders' equity was a $200,000 increase.
a. True
b. False

ANSWER: True

23. A fiscal year that ends when business activities have reached their lowest point is called the natural business
year.
a. True
b. False

ANSWER: True

24. The Financial Accounting Standards Board (FASB) is the authoritative body that has primary responsibility for
developing accounting principles.
a. True
b. False

ANSWER: True

25. Purchasing supplies on account increases liabilities and decreases equity.
a. True
b. False

ANSWER: False

26. All companies must use a calendar year as their fiscal year.
a. True
b. False

ANSWER: False

27. Paying an account payable increases liabilities and decreases assets.
a. True
b. False

ANSWER: False

28. If the liabilities owed by a business total $300,000 and stockholders' equity is equal to $300,000, then the assets
also total $300,000.
a. True
b. False

ANSWER: False




Page 4

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