Test Bank all Chapters,

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

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

(Download link at the end of this file)

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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

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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

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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

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