Financial Accounting IFRS, Global Edition, 12th edition BY Walter T. Harrison
Email: richard@qwconsultancy.com
Financial Accounting, IFRS, 12e, GE Thomas/Tietz/Suwardy/Koh/Harrison/Horngren 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 .
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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: A) measures business activities. B) processes data into reports and communicates the data to decision makers. C) is often called the language of business. D) is all of the above. Answer: D .
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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: A) profit and nonprofit. B) financial and managerial. C) internal and external. D) 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: A) includes information such as budgets and forecasts. B) is used to make strategic decisions for the entity. C) must be relevant to decision makers within the entity. D) 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
1.1-14
What type of accounting provides information for decision makers outside the entity? A) Bookkeeping B) Managerial accounting. C) Internal auditing. D) Financial accounting. Answer: D LO: 1-1 Difficulty: 2 AACSB: Analytical skills AICPA Functional Competencies: Measurement, Reporting AICPA Business Perspective Competencies: Industry sector
1.1-15
Who ultimately controls a corporation? A) Board of Directors B) The Chief Executive Officer (CEO) C) The shareholders D) The President Answer: C LO: 1-1 Difficulty: 2 .
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AACSB: Analytical skills AICPA Functional Competencies: Measurement AICPA Business Perspective Competencies: Legal/regulatory 1.1-16
For which form of business ownership are the owners of a business legally distinct from the business? A) Corporation B) Partnership C) Proprietorship D) All of the above Answer: A LO: 1-1 Difficulty: 1 AACSB: Analytical skills AICPA Functional Competencies: Measurement AICPA Business Perspective Competencies: Legal/regulatory
1.1-17
Characteristics of a sole proprietor include: A) multiple owners. B) limited personal liability for all business debts. C) a distinct entity, separate from its owner for accounting purposes. D) formation under state law. Answer: C LO: 1-1 Difficulty: 1 AACSB: Analytical skills AICPA Functional Competencies: Measurement AICPA Business Perspective Competencies: Legal/regulatory
1.1-18
A partnership: A) is a taxpaying entity. B) is not a distinct entity, separate from its owners for accounting purposes. C) has mutual agency. D) has limited liability for the partners. Answer: C LO: 1-1 Difficulty: 2 AACSB: Analytical skills AICPA Functional Competencies: Measurement AICPA Business Perspective Competencies: Legal/regulatory
1.1-19
A limited-liability partnership is made up of: A) partners. B) sole proprietors. C) members. D) shareholders. Answer: C LO: 1-1 Difficulty: 1 AACSB: Analytical skills AICPA Functional Competencies: Measurement .
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