Question

1. a department store is an example of a manufacturer.

a. true
b. false

1. business entities and non - business entities are both organized to earn a profit.

a. true
b. false

1. assets can be tangible or intangible in nature.

a. true
b. false

1. bondholders are external users of company’s accounting information.

a. true
b. false

1. assets may be used to satisfy business obligations and to carry on business operations.

a. true
b. false

1. because market values are subjective, many assets are carried on the balance sheet at their cost.

a. true
b. false

1. the primary objective of external auditors is to provide assurance to stockholders and other the statements are fairly presented.

a. true
b. false

Explanation:

1. A department store buys goods and sells them, not manufactures, so it's false.
2. Non - business entities are not organized for profit, so it's false.
3. Assets like buildings (tangible) and patents (intangible) exist, so it's true.
4. Bondholders are outside the company and use accounting info, so it's true.
5. Assets are used for obligations and operations, so it's true.
6. Due to subjectivity of market values, many assets are at cost on balance sheet, so it's true.
7. External auditors' main goal is to assure stockholders and others of fair statement presentation, so it's true.

Answer:

1. b. False
2. b. False
3. a. True
4. a. True
5. a. True
6. a. True
7. a. True