138 Free Test Bank for Financial Accounting 10th Edition by Harrison 

Below are 138 Free Test Bank for Financial Accounting 10th Edition by Harrison which is an up-date material source of financial accounting to help you practice and learn the concepts included in this textbook. Take these free online textbook financial accounting test bank questions below to check your knowledge and skills for passing your examination that after completing this practice that you can know what you need to prepare for you exam.
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To be useful, accounting information must have the fundamental qualitative characteristics of:

•  A) comparability and relevance.
•  B) relevance and faithful representation.
•  C) materiality and understandability.
•  D) faithful representation and timeliness.

In 1960, Johnson Company purchased a building for $100,000. In 2013, a real estate professional says the building has a fair value of $1,000,000. In 2013, a similar building down the street recently sold for $900,000. What value is reported for the building on the balance sheet at December 31, 2013?

•  A) $100,000
•  B) $550,000
•  C) $900,000
•  D) $1,000,000

Which of the following is a TRUE statement about the characteristics of partnerships?

•  A) Limited partners have mutual agency and unlimited liability for the partnership's debts.
•  B) General partners have mutual agency and limited liability for the partnership's debts.
•  C) Net income and loss of the partnership "flows through" to the partners.
•  D) The partnership agreement must be in writing.

Which of the following statements is TRUE for a limited liability company?

•  A) Members have unlimited liability for the debts of the business.
•  B) Members have limited liability for the debts of the business.
•  C) Only the limited partners have limited liability for the debts of the business.
•  D) The general partner has unlimited liability for the debts of the business.

Which of the following have unlimited liability for a company's debts?

•  A) owners of a corporation
•  B) members of a limited liability company
•  C) limited partners in a limited liability partnership
•  D) general partner in a limited liability partnership

Information must be sufficiently transparent so that it makes sense to reasonably informed users of the financial statements, such as creditors. This qualitative characteristic of information is called:

•  A) verifiability.
•  B) faithful representative.
•  C) relevant.
•  D) understandability.

Shareholders of a corporation:

•  A) have limited liability for the corporation's debts.
•  B) have unlimited liability for the corporation's debts.
•  C) have unlimited liability for the actions of other stockholders.
•  D) receive dividends from the corporation without having to pay tax on the distribution.

The fair value of a plant asset is equal to:

•  A) the amount the business could sell the asset for.
•  B) the amount of cash paid plus the dollar value of noncash consideration given in exchange for the plant asset at acquisition.
•  C) the amount of cash paid plus the loan taken out to finance the purchase of the plant asset.
•  D) the amount a company can receive for the asset when sold in order to go out of business.

The entity assumption does NOT apply to a:

•  A) proprietorship.
•  B) limited liability partnership.
•  C) limited-liability company.
•  D) The entity assumption applies to all the above.

Which of the following statements is TRUE for a proprietorship?

•  A) Legally, a proprietorship is separate from the proprietor.
•  B) For accounting purposes, a proprietorship is separate from the proprietor.
•  C) For accounting purposes, a proprietorship is not separate from the proprietor.
•  D) A and B

Characteristics of faithfully representative information do NOT include:

•  A) complete.
•  B) neutral.
•  C) accurate.
•  D) relevant.

A disadvantage of general partnerships is:

•  A) double taxation of distributed profits.
•  B) the partnership's assets are commingled with each partner's personal assets.
•  C) state rules and regulations must be followed.
•  D) each partner may conduct business in the name of the entity and make agreements that legally bind all partners.

Which statement is TRUE about partnerships?

•  A) Legally, a partnership is separate from the partners.
•  B) A partnership has one capital account.
•  C) For accounting purposes, a partnership is separate from the partners.
•  D) For accounting purposes, a partnership is not separate from the partners.

Advantages of a corporation include:

•  A) each stockholder can enter into agreements that legally bind all the stockholders.
•  B) the double taxation of distributed profits.
•  C) limited liability of the stockholders for the corporation's debts.
•  D) each stockholder can conduct business in the name of the corporation.

Enhancing qualitative characteristics of accounting information do NOT include:

•  A) comparability.
•  B) verifiability.
•  C) timeliness.
•  D) materiality.

Which of the following statements is FALSE?

•  A) The Securities and Exchange Commission is investigating whether all U.S. public companies should adopt International Financial Reporting Standards.
•  B) The advantage of a uniform set of global accounting standards is that financial statements from a U.S. company will be comparable to those of a foreign company.
•  C) In the long run, a uniform set of global accounting standards will reduce the costs of doing business globally.
•  D) With a uniform set of global accounting standards, companies will have to produce multiple versions of their financial statements.

The ________ is elected by the stockholders and is responsible for setting policy and appointing officers.

•  A) board of directors
•  B) chief executive officer (CEO)
•  C) chief financial officer (CFO)
•  D) advisory council

Accounting:

•  A) measures business activities.
•  B) processes data into reports and communicates the data to decision makers.
•  C) is often called the language of business.
•  D) is all of the above.

In order to compare the financial statements of Toyota Corporation to the financial statements of General Motors, it would be preferable to use _________.

•  A) U.S. Generally Accepted Accounting Principles for General Motors and International Financial Reporting Standards for Toyota.
•  B) U.S. Generally Accepted Accounting Principles for both companies.
•  C) International Financial Reporting Standards for both companies.
•  D) U.S. Generally Accepted Accounting Principles for Toyota Corporation and International Financial Reporting Standards for General Motors.

Which of the following is a CORRECT statement about GAAP and IFRS?

•  A) IFRS prefers valuing assets at historical cost while GAAP prefers using fair value.
•  B) IFRS is more "rules-based" than GAAP.
•  C) The FASB and the IASB are working towards convergence of standards.
•  D) The SEC will require all companies to use IFRS beginning in 2013.

The process of verifying accounting information in financial statements is undertaken by:

•  A) the Securities and Exchange Commission.
•  B) internal auditors only.
•  C) external auditors only.
•  D) internal and external auditors.