4 2-2 Moderate 9 2-5 Difficult 5 2-2/2-3 Difficult 10 2-5 Difficult Other No. Obj. Difficulty No. Obj. Difficulty 1 2-2 Easy TRUE/FALSE 1. The basic elements of a financial accounting system include a framework for preparing financial statements. ANS: T PTS: 1 DIF: Easy OBJ: 2-1 NAT: AACSB Reflective Thinking | AICPA FN-Reporting 2. The accounting equation is expressed as follows: Assets = Liabilities Stockholders’ Equity. – ANS: F PTS: 1 DIF: Easy OBJ: 2-1 NAT: Analytic | AICPA FN-Reporting 3. Any transaction must affect all three parts of the accounting equation. ANS: F PTS: 1 DIF: Easy OBJ: 2-1 NAT: AACSB Analytic | AICPA FN-Reporting 4. Dividends are an example of an expense. ANS: F PTS: 1 DIF: Moderate OBJ: 2-1 NAT: AACSB Analytic | AICPA FN-Measurement 5. Retained earnings will be reduced by the amount in the dividend account. ANS: T PTS: 1 DIF: Moderate OBJ: 2-1 NAT: AACSB Analytic | AICPA FN-Measurement 6. By keeping a running total of the effects of transactions, the accounting equation provides a framework for summarizing the effects of a series of transactions. ANS: T PTS: 1 DIF: Easy OBJ: 2-1 NAT: AACSB Reflective Thinking | AICPA FN-Reporting 7. A business receives $10,000 cash for a sale of merchandise and records this receipt of cash as an increase in equipment by mistake. The accounting equation is still in balance. ANS: T PTS: 1 DIF: Moderate OBJ: 2-1 NAT: Analytic | AICPA FN-Reporting
4 2-2 Moderate 9 2-5 Difficult 5 2-2/2-3 Difficult 10 2-5 Difficult Other No. Obj. Difficulty No. Obj. Difficulty 1 2-2 Easy TRUE/FALSE 1. The basic elements of a financial accounting system include a framework for preparing financial statements. ANS: T PTS: 1 DIF: Easy OBJ: 2-1 NAT: AACSB Reflective Thinking | AICPA FN-Reporting 2. The accounting equation is expressed as follows: Assets = Liabilities – Stockholders’ Equity. ANS: F PTS: 1 DIF: Easy OBJ: 2-1 NAT: Analytic | AICPA FN-Reporting 3. Any transaction must affect all three parts of the accounting equation. ANS: F PTS: 1 DIF: Easy OBJ: 2-1 NAT: AACSB Analytic | AICPA FN-Reporting 4. Dividends are an example of an expense. ANS: F PTS: 1 DIF: Moderate OBJ: 2-1 NAT: AACSB Analytic | AICPA FN-Measurement 5. Retained earnings will be reduced by the amount in the dividend account. ANS: T PTS: 1 DIF: Moderate OBJ: 2-1 NAT: AACSB Analytic | AICPA FN-Measurement 6. By keeping a running total of the effects of transactions, the accounting equation provides a framework for summarizing the effects of a series of transactions. ANS: T PTS: 1 DIF: Easy OBJ: 2-1 NAT: AACSB Reflective Thinking | AICPA FN-Reporting 7. A business receives $10,000 cash for a sale of merchandise and records this receipt of cash as an increase in equipment by mistake. The accounting equation is still in balance. ANS: T PTS: 1 DIF: Moderate OBJ: 2-1 NAT: Analytic | AICPA FN-Reporting
Test-Bank-Survey-of-Accounting-4th-Edition-Warren.docx