1. The processing stage of accounting is accomplished by the recording

• The processing stage of accounting is accomplished by the recording

of data.

• True

*b. False

• The terms “bookkeeping” and “accounting” are not synonymous.

*a. True

• False
• A company's management information system is a subsystem of its

accounting information system.

• True

*b. False

• Accountants focus on the needs for financial information by both

internal and external decision makers.*a. True

• False
• Accountants consider money the common unit of measure for all

business transactions.*a. True

• False
• Payment to a creditor is an example of a nonexchange business

transaction.

• True

*b. False

• For accounting purposes, a business and its owner are considered the

same entity.

• True

*b. False

• Knowledge of the exchange rate is necessary to apply the money

measure concept in case of international transactions.*a. True

• False

Financial and Managerial Accounting 10e Belverd Needles, Marian Powers, Susan Crosson (Test Bank All Chapters, 100% Original Verified, A+ Grade) Chapter 1 1 / 4

• For reporting purposes, the personal assets and debts of a business

owner should be combined with the assets and debts of the business.

• True

*b. False

• Exchange rates for currency change daily according to the supply

and demand for each currency.*a. True

• False
• The day-by-day accumulation of interest is considered a transaction

involving an exchange of value.

• True

*b. False

• Sole proprietorships in the United States generate more business

(in terms of receipts) than partnerships and corporations put together.

• True

*b. False

• A corporation is an economic unit that is legally separate from its

owners.*a. True

• False
• Corporations represent the largest number of businesses in the

United States.

• True

*b. False

• The liability of corporate stockholders is limited to their

percentage share of ownership.

• True

*b. False

• The stockholders of a corporation elect the board of directors.

*a. True

• False 2 / 4

• In general, one partner acting alone cannot obligate the

partnership to another party.

• True

*b. False

• A partnership is dissolved when any partner leaves the business or

dies.*a. True

• False
• The personal resources of any partner can be called upon to pay the

obligations of the partnership.*a. True

• False
• When a corporate stockholder sells his or her shares of stock, the

corporation is technically dissolved.

• True

*b. False

• The board of directors appoints the audit committee, which in turn

performs an independent audit of the company’s records.

• True

*b. False

• The articles of incorporation may be found in the corporate

charter.*a. True

• False
• Authorized shares of stock refer to the number of shares currently

held by the stockholders.

• True

*b. False

• Corporate governance is the oversight of a company’s management

performance and ethics by its board of directors. 3 / 4

*a. True

• False
• The board of directors carries out the day -to-day operations of a

corporation.

• True

*b. False

• The number of authorized shares of stock may be less than the

number of outstanding shares.

• True

*b. False

• The management of a corporation is responsible for electing the

board of directors.

• True

*b. False

• Dividends are an example of an expense.
• True

*b. False

• The obligation to provide services to another entity is a type of

liability.*a. True

• False
• Net assets equal stockholders’ equity.

*a. True

• False
• Stockholders’ equity equals assets minus liabilities.

*a. True

• False
• Inventory is an example of a nonmonetary asset.

*a. True

• False
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