Fundamental Accounting Principles 19th Edition Test Bank
Fundamental Accounting Principles 19th Edition Test Bank is an essential resource to help you tackle your upcoming exams with confidence. This guide includes key questions and answers to boost your exam preparation.
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Chapter 1 Testbank
Student: ___________________________________________________________________________
1. Accounting is an information and measurement system that identifies, records, and communicates
relevant, reliable, and comparable formation about an organization's business activities.
True False
2. Bookkeeping is the same as accounting.
True False
3. Bookkeeping is the recording of transactions and events and is only part of accounting.
True False
4. An accounting information system communicates data to help businesses make better decisions.
True False
5. Managerial accounting is the area of accounting that provides internal reports to assist the decision
making needs of internal users.
True False
6. Internal operating activities include research and development, distribution, and human resources.
True False
7. The primary objective of financial accounting is to provide general purpose financial statements to help
external users analyze and interpret an organization's activities.
True False
8. External auditors examine financial statements to verify that they are prepared according to generally
accepted accounting principles.
True False
9. External users include lenders, shareholders, customers, and regulators.
True False
10. Regulators often have legal authority over certain activities of organizations.
True False
11. Internal users include lenders, shareholders, brokers and managers.
True False
12. Opportunities in accounting include auditing, consulting, market research, and tax planning.
True False
13. Identifying the proper ethical path is easy.
True False
14. The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether is has adopted a
code of ethics for its senior financial officers and the contents of that code.
True False
15. Good ethics are good business.
True False
16. The Sarbanes-Oxley Act (SOX) does not require public companies to apply both accounting oversight
and stringent internal controls.
True False
Student: ___________________________________________________________________________
1. Accounting is an information and measurement system that identifies, records, and communicates
relevant, reliable, and comparable formation about an organization's business activities.
True False
2. Bookkeeping is the same as accounting.
True False
3. Bookkeeping is the recording of transactions and events and is only part of accounting.
True False
4. An accounting information system communicates data to help businesses make better decisions.
True False
5. Managerial accounting is the area of accounting that provides internal reports to assist the decision
making needs of internal users.
True False
6. Internal operating activities include research and development, distribution, and human resources.
True False
7. The primary objective of financial accounting is to provide general purpose financial statements to help
external users analyze and interpret an organization's activities.
True False
8. External auditors examine financial statements to verify that they are prepared according to generally
accepted accounting principles.
True False
9. External users include lenders, shareholders, customers, and regulators.
True False
10. Regulators often have legal authority over certain activities of organizations.
True False
11. Internal users include lenders, shareholders, brokers and managers.
True False
12. Opportunities in accounting include auditing, consulting, market research, and tax planning.
True False
13. Identifying the proper ethical path is easy.
True False
14. The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether is has adopted a
code of ethics for its senior financial officers and the contents of that code.
True False
15. Good ethics are good business.
True False
16. The Sarbanes-Oxley Act (SOX) does not require public companies to apply both accounting oversight
and stringent internal controls.
True False
17. A partnership is a business owned by two or more people.
True False
18. Owners of a corporation are called shareholders or stockholders.
True False
19. In the partnership form of business, the owners are called stockholders.
True False
20. A sole proprietorship is one or more individuals selling products or services for profit.
True False
21. Accounting information is communicated to various parties through financial statements.
True False
22. The balance sheet shows whether or not the firm had net income or loss over a period of time.
True False
23. The Financial Accounting Standards Board is the private group that sets both broad and specific
accounting principles.
True False
24. The business entity principle means that a business will continue operating for an indefinite period of
time.
True False
25. Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for
preparing financial statements.
True False
26. The business entity principle means that a business is accounted for separately from other business
entities, including its owner or owners.
True False
27. As a general rule, revenues should not be recognized in the accounting records until it is received in
cash.
True False
28. Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial
statements and arise out of long-used accounting practice.
True False
29. General accounting principles arise from long-used accounting practice.
True False
30. A sole proprietorship is a business owned by one or more persons.
True False
31. Unlimited liability is an advantage of a sole proprietorship.
True False
32. Understanding generally accepted accounting principles is not necessary to use and interpret financial
statements.
True False
33. The International Accounting Standards board (IASB) has the authority to impose its standards on
companies around the world.
True False
34. Objectivity means that financial information is supported by independent unbiased evidence.
True False
True False
18. Owners of a corporation are called shareholders or stockholders.
True False
19. In the partnership form of business, the owners are called stockholders.
True False
20. A sole proprietorship is one or more individuals selling products or services for profit.
True False
21. Accounting information is communicated to various parties through financial statements.
True False
22. The balance sheet shows whether or not the firm had net income or loss over a period of time.
True False
23. The Financial Accounting Standards Board is the private group that sets both broad and specific
accounting principles.
True False
24. The business entity principle means that a business will continue operating for an indefinite period of
time.
True False
25. Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for
preparing financial statements.
True False
26. The business entity principle means that a business is accounted for separately from other business
entities, including its owner or owners.
True False
27. As a general rule, revenues should not be recognized in the accounting records until it is received in
cash.
True False
28. Specific accounting principles are basic assumptions, concepts, and guidelines for preparing financial
statements and arise out of long-used accounting practice.
True False
29. General accounting principles arise from long-used accounting practice.
True False
30. A sole proprietorship is a business owned by one or more persons.
True False
31. Unlimited liability is an advantage of a sole proprietorship.
True False
32. Understanding generally accepted accounting principles is not necessary to use and interpret financial
statements.
True False
33. The International Accounting Standards board (IASB) has the authority to impose its standards on
companies around the world.
True False
34. Objectivity means that financial information is supported by independent unbiased evidence.
True False
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