FINANCIAL ACCOUNTING 7TH EDITION BY MICHELLE HANLON, ROBERT MAGEE, GLENN PFEIFFER TEST BANK
5 vues 0 achat
Cours
FINANCIAL ACCOUNTING
Établissement
FINANCIAL ACCOUNTING
Multiple Choice
Topic: Business organizations
LO: 1
1. Which of the following forms of business organizations exists as a legal entity?
A) A sole proprietorship
B) A partnership
C) A corporation
D) A labor union
Answer: C
Rationale: A corporation is a form of business organization that ex...
LO1-1 Identify the users of
accounting information and
1, 2 1-3 1, 2 2, 5, 6
discuss the costs and benefits of
disclosure. (p. 1-3)
LO1-2 Describe a company's
business activities and explain
how these activities are 3-6 4, 5 3 1, 6
represented by the accounting
equation. (p. 1-7)
LO1-3 Introduce the four key
financial statements including the
balance sheet, income statement,
7-9 4, 6-11 4-11 1-5
statement of stockholders' equity,
and statement of cash flows.
(p. 1-11)
LO1-4 Describe the institutions
that regulate financial accounting
and their role in establishing 10-12 12, 19, 20 3, 4
generally accepted accounting
principles. (p. 1-16)
LO1-5 Compute two key ratios
that are commonly used to
assess profitability and risk - 13, 14 13-18 13, 14
return on equity and the debt-to-
equity ratio. (p. 1-21)
LO1-6 Appendix 1A: Explain the
conceptual framework for 15, 16 21, 22 12 3, 5
financial reporting. (p. 1-25)
.
1-1 Financial Accounting, 7th Edition
Downloaded by: tutorsection | sectiontutor@gmail.com Want to earn $1.236
Distribution of this document is illegal extra per year?
,Chapter 1: Introducing Financial Accounting
True/False
Topic: Cost and benefits of disclosure
LO: 1
1. One reason companies are motivated to disclose financial information to external decision makers is
that it may lower financing and operating costs.
Answer: True
Rationale: For example, when a company applies for a loan, the bank uses the company’s financial
statements to help determine the appropriate interest rate. Without this financial information, a company
may have a higher cost of borrowing or not obtain the loan at all.
Topic: Demand for accounting information
LO: 1
2. Financial accounting is designed primarily for decision makers within the company.
Answer: False
Rationale: Financial accounting is designed primarily to provide information to decision makers outside
of the company, while managerial accounting is designed primarily for decision makers within the
company.
Topic: Investing activities
LO: 2
3. Investing activities are the acquiring and disposing of liabilities that a company needs in order to finance
its operating activities.
Answer: False
Rationale: Investing activities are the acquiring and disposing of assets that a company needs for the
production and sale of a company’s products and services.
Topic: Accounting equation
LO: 2
4. Assets must always equal liabilities plus stockholders’ equity.
Answer: True
Rationale: The accounting equation is Assets = Liabilities + Stockholders’ Equity. This relation must
always stay in balance.
.
Test Bank, Chapter 1 1-2
Downloaded by: tutorsection | sectiontutor@gmail.com Want to earn $1.236
Distribution of this document is illegal extra per year?
, Topic: Financing activities
LO: 2
5. Other than operating profit, there are three main sources of external financing.
Answer: False
Rationale: There are two main sources of financing: owner (also called shareholder or equity) financing
and nonowner (also called creditor or lender) financing.
Topic: Financing and investing activities
LO: 2
6. Financing activities are defined as the acquiring and disposing of resources for the purpose
of selling products and services.
Answer: False
Rationale: Financing activities are defined as methods a company uses to raise funds to pay for
resources. Investing activities are defined as the acquiring and disposing of resources for the purpose
of selling products and services.
Topic: Statement of cash flows
LO: 3
7. A statement of cash flows reports on cash flows for operating, investing and financing activities at a
point in time.
Answer: False
Rationale: A statement of cash flows reports on cash flows for operating, investing, and financing
activities over a period of time.
Topic: Retained earnings
LO: 3
8. Retained earnings are present on both the income statement and the statement of stockholders’ equity.
Answer: False
Rationale: Retained earnings are present in the statement of stockholders’ equity and the balance
sheet. The income statement represents current period earnings.
Topic: Balance sheet
LO: 3
9. If Beatty Company reports retained earnings of $242.6 million on its balance sheet, it will also
report $242.6 million in cash.
Answer: False
Rationale: The accounting equation requires total assets to equal total liabilities plus stockholders’
equity. That does not imply, however, that liability and equity accounts relate directly to specific assets.
.
1-3 Financial Accounting, 7th Edition
Downloaded by: tutorsection | sectiontutor@gmail.com Want to earn $1.236
Distribution of this document is illegal extra per year?
Les avantages d'acheter des résumés chez Stuvia:
Qualité garantie par les avis des clients
Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.
L’achat facile et rapide
Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.
Focus sur l’essentiel
Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.
Foire aux questions
Qu'est-ce que j'obtiens en achetant ce document ?
Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.
Garantie de remboursement : comment ça marche ?
Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.
Auprès de qui est-ce que j'achète ce résumé ?
Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur Succeed. Stuvia facilite les paiements au vendeur.
Est-ce que j'aurai un abonnement?
Non, vous n'achetez ce résumé que pour €22,57. Vous n'êtes lié à rien après votre achat.