Test Bank For Financial Accounting The Cornerstone of Business Decisions International

Chapter 1—Accounting and the Financial Statements

TRUE/FALSE

1. There are more corporations than sole proprietorships and partnerships in the United States.

ANS:  F                    PTS:   1                    DIF:    Easy               OBJ:   1-1

NAT:  AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose

2. The three main business activities are financing, operating, and investing.

ANS:  T                    PTS:   1                    DIF:    Easy               OBJ:   1-2

NAT:  AICPA FN-Reporting | AACSB Communication | ACBSP-APC-03-Business Forms

3. Internal users of accounting information include present creditors and management.

ANS:  F                    PTS:   1                    DIF:    Easy               OBJ:   1-1

NAT:  AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose

4. The income statement summarizes the assets, liabilities and stockholders’ equity for a period of time.

ANS:  F                    PTS:   1                    DIF:    Easy               OBJ:   1-3

NAT:  AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

5. The four basic financial statements are the Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows.

ANS:  T                    PTS:   1                    DIF:    Easy               OBJ:   1-3

NAT:  AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement