True False Questions

1-1 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Chapter 01 Introducing Financial Accounting True / False Questions [Question] 1.Accounting is an information and measurement system that identifies, records, and communicates financial information to users.

Answer: TRUE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 01-C1

Topic: Accounting

[Question] 2.Bookkeeping is the sole purpose of accounting.

Answer: FALSE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 01-C1

Topic: Accounting

[Question] 3.Accounting is one way important financial information about businesses is reported to decision makers.

Answer: TRUE

Financial Accounting Fundamentals 4e John Wild (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

Chapter 01 - Introducing Financial Accounting 1-2 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 01-C2

Topic: Accounting

[Question]

• Managerial accounting is an area of accounting that provides internal reports to assist the

decision- making needs of internal users.

Answer: TRUE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 01-C2

Topic: Managerial Accounting

Topic: Internal Information Users

[Question]

• The internal information users of a business include the managers of: research and

development, distribution, and human resources.

Answer: TRUE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 01-C2

Topic: Internal Information Users 2 / 4

Chapter 01 - Introducing Financial Accounting 1-3 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

[Question]

• The primary objective of financial accounting is to provide general-purpose financial

statements to help external users analyze and interpret an organization's activities.

Answer: True

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 01-C2

Topic: Financial Accounting

Topic: General Purpose Financial Statements

[Question]

• External auditors audit the financial statements to verify that they are prepared according to

generally accepted accounting principles.

Answer: True

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 01-C2

Topic: External Auditor

[Question]

• Internal users of accounting information include lenders, shareholders, brokers, and

managers.

Answer: FALSE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 01-C2

Topic: Internal Information Users

• / 4

Chapter 01 - Introducing Financial Accounting 1-4 © 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

[Question]

• Auditors are banned from direct investments with their clients.

Answer: TRUE

Blooms Taxonomy: Understand

AACSB: Analytic

AACSB: Communication

AACSB: Ethics

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 2 Medium

Learning Objective: 01-C3

Topic: Ethics

[Question]

• Ownership of a corporation is divided into units called shares or stock.

Answer: TRUE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 01-C4

Topic: Stock

[Question]

• The Financial Accounting Standards Board is a private group that sets both broad and

specific accounting principles.

Answer: TRUE

Blooms Taxonomy: Remember

AACSB: Analytic

AACSB: Communication

AACSB: Ethics

AICPA BB: Critical Thinking

AICPA BB: Industry

AICPA FN: Measurement

AICPA FN: Reporting

Difficulty: 1 Easy

Learning Objective: 01-C4

Topic: Financial Accounting Standards Board

• / 4