Test Bank all Chapters,

Fundamental Accounting Principles, Volume 1, 17e Edition By Kermit Larson

(Test Bank all Chapters, Answer at the end of each Chapter)

(Download link at the end of this file)

• / 4

Version 1 1 Chapter 1

1) Accounting is an information system that identifies, measures, records and communicates relevant information that objectively and correctly represents an organization's economic activities.⊚ true ⊚ false

2) Accounting information helps people make better decisions about the performance of a business.⊚ true ⊚ false

3) The main objective of accounting is to help people to invest in new products and businesses.⊚ true ⊚ false

4) Recordkeeping" is another term for "accounting".⊚ true ⊚ false

5) A sole proprietorship is a business owned by one or more persons.⊚ true ⊚ false

6) A partnership requires no special legal requirements to start, other than to register the business name and obtain a business license.⊚ true ⊚ false

7) Ownership of a corporation is divided into units called shares.⊚ true ⊚ false

• / 4

Version 1 2 8) In the partnership form of business, the owners of a business are called shareholders.⊚ true ⊚ false

9) Unlimited liability is an advantage for both a proprietorship and a partnership.⊚ true ⊚ false

10) Although a proprietorship is not a separate legal entity, a partnership is.⊚ true ⊚ false

11) A corporation is responsible for its actions and any debts incurred. It can enter into its own contracts, and it can buy, own, and sell property.⊚ true ⊚ false

12) Non-business organizations often operate educational and religious services for profit.⊚ true ⊚ false

13) Sole proprietorships and partnerships are not subject to income tax in Canada.⊚ true ⊚ false

14) External users include lenders such as banks, and other creditors such as suppliers and bondholders.⊚ true ⊚ false

• / 4

Version 1 3 15) Internal users include creditors, shareholders, internal auditors, and managers.⊚ true ⊚ false

16) Managerial accounting provides special-purpose reports customized to meet the information needs of internal users.⊚ true ⊚ false

17) Internal operating functions include research and development, distribution, and human resources.⊚ true ⊚ false

18) Internal controls include procedures to protect assets and prevent fraud.⊚ true ⊚ false

19) Career opportunities in accounting include auditing, forensic accounting, and tax planning.⊚ true ⊚ false

20) Budgeting is the process of developing formal plans for an organization's future activities.⊚ true ⊚ false

21) At the request of the Board of Directors, internal auditors perform the audit function to protect shareholder interests.⊚ true ⊚ false

• / 4