Chapter 01
Accounting in Business
True / False Questions
1. Accounting is an information system that identifies, measures, records and communicates relevant information that objectively and correctly represents an organization's economic activities.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-02 Power of Accounting
2. Accounting information helps people make better decisions about the performance of a business.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-02 Power of Accounting
3. The main objective of accounting is to help people to invest in new products and businesses.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-07 External Information Users
4. Recordkeeping" is another term for "accounting".
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-03 Focus of Accounting
5. A sole proprietorship is a business owned by one or more persons.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
6. A partnership requires no special legal requirements to start, other than to register the business name and obtain a business licence.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
7. Ownership of a corporation is divided into units called shares.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
8. In the partnership form of business, the owners of a business are called shareholders.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
9. Unlimited liability is an advantage for both a proprietorship and a partnership.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
10. Although a proprietorship is not a separate legal entity, a partnership is.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
11. A corporation is responsible for its actions and any debts incurred. It can enter into its own contracts, and it can buy, own, and sell property.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
12. Non-business organizations often operate educational and religious services for profit.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-04 Forms of Organization
13. Sole proprietorships and partnerships are not subject to income tax in Canada.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-12 Taxation
14. External users include lenders such as banks, and other creditors such as suppliers and bondholders.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Accounting in Business
True / False Questions
1. Accounting is an information system that identifies, measures, records and communicates relevant information that objectively and correctly represents an organization's economic activities.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-02 Power of Accounting
2. Accounting information helps people make better decisions about the performance of a business.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-02 Power of Accounting
3. The main objective of accounting is to help people to invest in new products and businesses.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-07 External Information Users
4. Recordkeeping" is another term for "accounting".
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-01 Describe the purpose and importance of accounting.
Topic: 01-03 Focus of Accounting
5. A sole proprietorship is a business owned by one or more persons.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
6. A partnership requires no special legal requirements to start, other than to register the business name and obtain a business licence.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
7. Ownership of a corporation is divided into units called shares.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
8. In the partnership form of business, the owners of a business are called shareholders.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
9. Unlimited liability is an advantage for both a proprietorship and a partnership.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
10. Although a proprietorship is not a separate legal entity, a partnership is.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
11. A corporation is responsible for its actions and any debts incurred. It can enter into its own contracts, and it can buy, own, and sell property.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-05 Business Organizations
12. Non-business organizations often operate educational and religious services for profit.
FALSE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-04 Forms of Organization
13. Sole proprietorships and partnerships are not subject to income tax in Canada.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Learning Objective: 01-02 Describe forms of business organization.
Topic: 01-12 Taxation
14. External users include lenders such as banks, and other creditors such as suppliers and bondholders.
TRUE
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy