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Financial Accounting IFRS (Global Edition) 11th Edition, Walter Harrison, Charles Horngren, Wendy Tietz, William Thomas, Themin Suwardy (Test Bank All Chapters) 1 / 4
Copyright © 2018 Pearson Education 1
Financial Accounting: IFRS, 11e, GE
Harrison/Horngren/Thomas/Tietz/Suwardy Test Item File
Chapter 1: Conceptual Framework and Financial Statements
1.1-1 Bookkeeping is a type of accounting used primarily by proprietorships.
Answer: False
LO: 1-1
Difficulty: 1
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Strategic/Critical Thinking
1.1-2 Bookkeeping is the mechanical part of accounting.
Answer: True
LO: 1-1
Difficulty: 1
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Strategic/Critical Thinking
1.1-3 The major forms of business organizations are proprietorships, partnerships, and for-profit organizations.
Answer: False
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry Sector
1.1-4 Limited Liability Partnerships (LLPs) have at least one general partner with unlimited liability for all partnership debts.
Answer: True
LO: 1-1
Difficulty: 1
AACSB: Analytical Skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry Sector, Legal/Regulatory
1.1-5 In an LLP, each partner is liable for partnership debts only to the extent of their investment in the partnership plus their share of the liabilities.
Answer: True
LO: 1-1
Difficulty: 2
AACSB: Analytical Skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry Sector, Legal/Regulatory 2 / 4
Copyright © 2018 Pearson Education 2
1.1-6 All business owners are personally liable for the debts of their businesses.
Answer: False
LO: 1-1
Difficulty: 2
AACSB: Analytical Skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry Sector, Legal/Regulatory
1.1-7 The business records of a proprietorship should include the proprietor’s personal finances.
Answer: False
LO: 1-1
Difficulty: 1
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry sector, Legal/Regulatory
1.1-8 Mutual agency of a partnership means that each partner may conduct business in the name of the partnership and can legally bind all the partners without limit for the partnership’s debts.
Answer: True
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Industry sector, Legal/Regulatory
1.1-9 Financial accounting provides budgeting information to a company’s managers.
Answer: False
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement, Reporting
AICPA Business Perspective Competencies: Industry sector
1.1-10 Managerial accounting information is used mainly by external users.
Answer: False
LO: 1-1
Difficulty: 1
AACSB: Analytical skills
AICPA Functional Competencies: Measurement, Reporting
AICPA Business Perspective Competencies: Industry sector
1.1-11 Accounting:
- measures business activities.
- processes data into reports and communicates the data to decision makers.
- is often called the language of business.
- is all of the above.
Answer: D 3 / 4
Copyright © 2018 Pearson Education 3
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement
AICPA Business Perspective Competencies: Strategic/Critical Thinking
1.1-12 The two types of accounting are:
- profit and nonprofit.
- financial and managerial.
- internal and external.
- bookkeeping and decision-oriented.
Answer: B
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement, Reporting
AICPA Business Perspective Competencies: Industry sector
1.1-13 Management accounting:
- includes information such as budgets and forecasts.
- is used to make strategic decisions for the entity.
- must be relevant to decision makers within the entity.
- is all of the above.
Answer: D
LO: 1-1
Difficulty: 2
AACSB: Analytical skills
AICPA Functional Competencies: Measurement, Reporting
AICPA Business Perspective Competencies: Industry sector
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