TEST BANK FOR FINANCIAL ACCOUNTING 7TH CANADIAN EDITON BY ROBERT LIBBY

Chapter 01 - Financial Statements and Business Decisions 1-1 Chapter 01 Financial Statements and Business Decisions True / False Questions 1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers. TRUE Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Easy Learning Objective: 01-01 Recognize both the information conveyed in each of the four basic financial statements and describe how the information is used by different decision makers (investors, creditors, and managers). Topic: 01-01 The Four Basic Financial Statements: An Overview 2. External users of accounting information include the managers who plan, organize, and run a business. FALSE Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 01-01 Recognize both the information conveyed in each of the four basic financial statements and describe how the information is used by different decision makers (investors, creditors, and managers). Topic: 01-01 The Four Basic Financial Statements: An Overview 3. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners.