True
False
This is false. Creditors have priority over stockholders in the event of a company's liquidation.
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Identify the ways accounting benefits
society.
The types of resources needed by a business are financial, physical, and labor resources.
True
False
This is true. The types of resources needed by a business are financial, physical, and labor resources.
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Identify the ways accounting benefits
society.
Financial accounting information is usually less detailed than managerial accounting information.
True
False
This is true. Financial accounting information is usually less detailed than managerial accounting information.
References
True / False Difficulty: 2 Medium Learning Objective: 01-01 Identify the ways accounting benefits
society.
135.
Award: 1.00 point
136.
Award: 1.00 point
137.
Award: 1.00 point
The Financial Accounting Standards Board is a privately funded organization with authority for establishing accounting standards for businesses in the US.
True
False
This is true. The Financial Accounting Standards Board is charged with establishing accounting standards for US businesses. It is not an agency of the US
government, but rather a privately funded organization.
References
True / False Difficulty: 2 Medium Learning Objective: 01-01 Identify the ways accounting benefits
society.
Detailed information about accounts is maintained in the various elements of the financial statements.
True
False
This is false. Detailed information about the elements is maintained in records commonly called accounts. The elements of the financial statements are divided
into accounts, not the other way around.
References
True / False Difficulty: 1 Easy Learning Objective: 01-03 Identify the elements of the accounting
equation.
Liabilities represent the future obligations of a business entity.
True
False
This is true. Liabilities represent the future obligations of a business entity.
References
True / False Difficulty: 2 Medium Learning Objective: 01-03 Identify the elements of the accounting
equation.
138.
Award: 1.00 point
139.
Award: 1.00 point
140.
Award: 1.00 point
Stockholders' equity is a source of a business's assets, but liabilities are not.
True
False
This is false. Stockholders' equity, both from investors and from earnings, as well as liabilities, are sources of a business's assets.
References
True / False Difficulty: 2 Medium Learning Objective: 01-03 Identify the elements of the accounting
equation.
Retained earnings reduces a company's commitment to use its assets for the benefit of its stockholders.
True
False
This is false. Retained earnings increases a company's commitment to use its assets for the benefit of its stockholders.
References
True / False Difficulty: 2 Medium Learning Objective: 01-03 Identify the elements of the accounting
equation.
The historical cost concept requires that most assets be recorded at the amount paid for them, regardless of increases in market value.
True
False
This is true. Once an asset is recorded, it is not adjusted for increases in market value.
References
True / False Difficulty: 2 Medium Learning Objective: 01-04 Show how business events affect the
accounting equation.
141.
Award: 1.00 point
142.
Award: 1.00 point
143.
Award: 1.00 point
An asset source transaction increases a business's assets and the claims to assets.
True
False
This is true. An asset source transaction increases a business's assets and either liabilities or stockholders' equity, which make up claims to assets.
References
True / False Difficulty: 1 Easy Learning Objective: 01-06 Classify business events as asset source,
use, or exchange transactions.
Borrowing money from the bank is an example of an asset source transaction.
True
False
This is true. Borrowing money from the bank is an example of an asset source transaction because the asset cash increases as well as the liability notes
payable.
References
True / False Difficulty: 1 Easy Learning Objective: 01-06 Classify business events as asset source,
use, or exchange transactions.
An asset use transaction does not affect the total amount of claims to a company's assets.