Test Bank For Fundamentals of Financial Accounting 5th Canadian Edition By Fred Phillips

Chapter 01

Business Decisions and Financial Accounting

True / False Questions

1. Building a new warehouse is an operating activity.
   TRUE

Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-15 The Statement of Cash Flows

2. The payment of dividends is a financing activity.
   TRUE

Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-15 The Statement of Cash Flows

3. Daily activities involved in running a business such as buying supplies and paying wages are operating activities.
   TRUE

Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-15 The Statement of Cash Flows

4. Financing activities include borrowing and obtaining money by issuing shares of ownership (called stock certificates).
   TRUE

Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Describe the purpose; structure; and content of the four basic financial statements.
Topic: 01-15 The Statement of Cash Flows

5. Shareholders are creditors of a company.
   FALSE

Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 Describe various organizational forms and business decision makers.
Topic: 01-10 Shareholders’ Equity

6. All corporations acquire financing by issuing shares of ownership (called stock certificates) for sale on public stock exchanges.
   FALSE

Blooms: Understand
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 Describe various organizational forms and business decision makers.
Topic: 01-04 Corporation