Accounting Principles 7Th Canadian Edition Volume 1 By Jerry J. Weygandt - Test Bank

1. Accounting is the information system that identifies, records, and communicates the economic events of an organization to a wide variety of interested users.

Answer: True

Bloomcode: Knowledge

Difficulty: Easy

Learning Objective: Identify the use and users of accounting and the objective of financial reporting.

Section Reference: Why Is Accounting Important?

CPA: Financial Reporting

2. A working knowledge of accounting can be useful to doctors or lawyers.

Answer: True

Bloomcode: Knowledge

Difficulty: Easy

Learning Objective: Identify the use and users of accounting and the objective of financial reporting.

Section Reference: Why Is Accounting Important?

CPA: Financial Reporting

3. The main objective of financial statements is to provide useful information to management.

Answer: False

Bloomcode: Knowledge

Difficulty: Easy

Learning Objective: Identify the use and users of accounting and the objective of financial reporting.

Section Reference: Why Is Accounting Important?

CPA: Financial Reporting

4. Employees are an example of an external user.

Answer: False

Bloomcode: Knowledge

Difficulty: Easy

Learning Objective: Identify the use and users of accounting and the objective of financial reporting.

Section Reference: Why Is Accounting Important?

CPA: Financial Reporting

5. Creditors are an example of an internal user of accounting information.

Answer: False

Bloomcode: Knowledge

Difficulty: Easy

Learning Objective: Identify the use and users of accounting and the objective of financial reporting.

Section Reference: Why Is Accounting Important?

CPA: Financial Reporting

6. Accounting information is used only by external users with a direct financial interest in a company.

Answer: False

Bloomcode: Knowledge

Difficulty: Easy

Learning Objective: Identify the use and users of accounting and the objective of financial reporting.

Section Reference: Why Is Accounting Important?

CPA: Financial Reporting

7. In a proprietorship, there may be two or more owners.

Answer: False

Bloomcode: Knowledge

Difficulty: Easy

Learning Objective: Compare the different forms of business organization.

Section Reference: Forms of Business Organization

CPA: Financial Reporting

8. One of the disadvantages of a proprietorship is that there is unlimited liability for the owner.

Answer: True

Bloomcode: Knowledge

Difficulty: Easy

Learning Objective: Compare the different forms of business organization.

Section Reference: Forms of Business Organization

CPA: Financial Reporting

9. Under the proprietorship form of business organization, no distinction is made between the business as an economic unit and its owner.