Test Bank For Financial Accounting 6th Edition By Libby
True / False Questions
- Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers.
TRUE
AACSB Tag: Communications
Difficulty: Easy
L.O.: 1
- Assets on the balance sheet are recorded at market value or replacement cost.
FALSE
AACSB Tag: Reflective Thinking
Difficulty: Easy
L.O.: 1
- In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners.
TRUE
AACSB Tag: Reflective Thinking
Difficulty: Easy
L.O.: 1
- The accounting period in which service revenue is recognized (i.e., revenue for services rendered) is generally the period in which the cash is collected.
FALSE
AACSB Tag: Reflective Thinking
Difficulty: Medium
L.O.: 1
1-1
©2009 McGraw-Hill Inc. Test Bank to accompany Libby Financial Accounting 6/e
Chapter 001: Financial Statements and Business Decisions
- Total assets are $70,000, total liabilities, $40,000 and contributed capital is $20,000; therefore, retained earnings are $15,000.
FALSE
AACSB Tag: Analytic
Difficulty: Medium
L.O.: 1
- The payment of a cash dividend to stockholders increases stockholders’ equity.
FALSE
AACSB Tag: Reflective Thinking
Difficulty: Medium
L.O.: 1
