Question 1

The following information is available for Isla Company for the month of May. How much is the profit for the month?

Accepted Answer

A)  $0 
B)  $10,000 
C)  $20,000 
D)  $30,000 
E)  $35,000 
A)  $0 
B)  $10,000 
C)  $20,000 
D)  $30,000 
E)  $35,000

Question 2

If the assets of a business increased $9,000 during a period of time and its liabilities increased $5,000 during the same period, equity in the business must have

Accepted Answer

A)  Increased $14,000 
B)  Decreased $14,000 
C)  Increased $4,000 
D)  Decreased $4,00 
E)  Decreased $6,000. 
A)  Increased $14,000 
B)  Decreased $14,000 
C)  Increased $4,000 
D)  Decreased $4,00 
E)  Decreased $6,000.

Question 3

The balance sheet shows whether or not the firm achieved its primary objective of earning a profit.

Accepted Answer

A) True 
 B)False

Question 4

The difference between a company's assets and its liabilities, or the residual interest in the assets of an entity that remains after deducting its liabilities, is called

Accepted Answer

A)  profit 
B)  shares 
C)  equity 
D)  revenue 
E)  net loss 
A)  profit 
B)  shares 
C)  equity 
D)  revenue 
E)  net loss

Question 5

The description of the relationship between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the

Accepted Answer

A)  balance sheet 
B)  accounting equation 
C)  business equation 
D)  liability equation 
E)  profit 
A)  balance sheet 
B)  accounting equation 
C)  business equation 
D)  liability equation 
E)  profit

Question 6

Although, in a sole proprietorship, owner investments are not recorded as revenue, any withdrawals are recorded as expenses.

Accepted Answer

A) True 
 B)False

Question 7

Payment of accounts payable decreases both liabilities and assets.

Accepted Answer

A) True 
 B)False

Question 8

In Canada, the national organization that has been established to train and monitor its highly qualified professionals to navigate through today's complex and dynamic business climate while demonstrating a commitment to its core values is called

Accepted Answer

A)  general Accountant. 
B)  management Accountant. 
C)  certified Management Accountants. 
D)  chartered Professional Accountants. 
E)  all of the choices are correct. 
A)  general Accountant. 
B)  management Accountant. 
C)  certified Management Accountants. 
D)  chartered Professional Accountants. 
E)  all of the choices are correct.

Question 9

Profit appears on which of the following statement(s)?

Accepted Answer

A)  Balance sheet 
B)  Income statement 
C)  Statement of changes in equity 
D)  Statement of cash flows 
E)  Both an income statement and statement of changes in equity 
A)  Balance sheet 
B)  Income statement 
C)  Statement of changes in equity 
D)  Statement of cash flows 
E)  Both an income statement and statement of changes in equity

Question 10

If the liabilities of a business increased $65,000 during a period of time and equity in the business decreased $21,000 during the same period, would the assets of the business have increased or decreased? By what amount?

Accepted Answer

Assets would have in

Question 11

Cash investments by owners are listed on which of the following statement(s)?

Accepted Answer

A)  Balance sheet 
B)  Income statement 
C)  Statement of changes in equity 
D)  Statement of cash flows 
E)  Both a statement of changes in equity and statement of cash flows 
A)  Balance sheet 
B)  Income statement 
C)  Statement of changes in equity 
D)  Statement of cash flows 
E)  Both a statement of changes in equity and statement of cash flows

Question 12

The balance sheet can be used in order to assess the creditworthiness of potential customers.

Accepted Answer

A) True 
 B)False

Question 13

As a rule, revenues should not be recognized in the accounting records until received in cash.

Accepted Answer

A) True 
 B)False

Question 14

Verifiability ensures that information is complete, neutral and free from error.

Accepted Answer

A) True 
 B)False

Question 15

Select the appropriate financial statement for each of the following items.(a) Income statement(b) Statement of changes in equity(c) Balance sheet(d) Statement of cash flows _____ (1) Supplies _____ (2) Profit _____ (3) Ahmad Khan, Capital _____ (4) Advertising Expense _____ (5) Cash paid to employees _____ (6) Withdrawals _____ (7) Fees earned _____ (8) Cash paid for supplies

Accepted Answer

(1) c (2) a, b, d (3

Question 16

How would the accounting equation of Lenore Turner's consulting business be affected by the billing of a client for $2,000 for consulting work completed?

Accepted Answer

A)  Accounts receivable, $2,000 increase, liabilities, $2,000 decrease. 
B)  Accounts receivable, $2,000 increase, liabilities, $2,000 increase. 
C)  Accounts receivable, $2,000 increase, cash, $2,000 increase. 
D)  Accounts receivable, $2,000 increase, equity, $2,000 increase. 
E)  Accounts receivable, $2,000 increase, cash, $2,000 decrease. 
A)  Accounts receivable, $2,000 increase, liabilities, $2,000 decrease. 
B)  Accounts receivable, $2,000 increase, liabilities, $2,000 increase. 
C)  Accounts receivable, $2,000 increase, cash, $2,000 increase. 
D)  Accounts receivable, $2,000 increase, equity, $2,000 increase. 
E)  Accounts receivable, $2,000 increase, cash, $2,000 decrease.

Question 17

Accounting information is considered to be relevant when it

Accepted Answer

A)  can be depended on to represent the economic conditions and events that it is intended to represent 
B)  is capable of making a difference in a decision 
C)  is understandable by reasonably informed users of accounting information 
D)  is verifiable and neutral 
E)  is free from bias 
A)  can be depended on to represent the economic conditions and events that it is intended to represent 
B)  is capable of making a difference in a decision 
C)  is understandable by reasonably informed users of accounting information 
D)  is verifiable and neutral 
E)  is free from bias

Question 18

Non-business organizations often operate educational and religious services for profit.

Accepted Answer

A) True 
 B)False

Question 19

In the partnership form of business, the owners of a business are called shareholders.

Accepted Answer

A) True 
 B)False

Question 20

The primary objective of financial accounting is

Accepted Answer

A)  to help organizations keep track of financing activities 
B)  to provide external reports to help users analyze an organization's activities 
C)  to help an organization define its ideas, goals, and action 
D)  to help an organization to keep track of its buying and selling of resources 
E)  to prepare budgets 
A)  to help organizations keep track of financing activities 
B)  to provide external reports to help users analyze an organization's activities 
C)  to help an organization define its ideas, goals, and action 
D)  to help an organization to keep track of its buying and selling of resources 
E)  to prepare budgets

The following information is available for Isla Company for the month of May. How much is the profit for the month?

If the assets of a business increased $9,000 during a period of time and its liabilities increased $5,000 during the same period, equity in the business must have

The balance sheet shows whether or not the firm achieved its primary objective of earning a profit.

The difference between a company's assets and its liabilities, or the residual interest in the assets of an entity that remains after deducting its liabilities, is called

The description of the relationship between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the

Although, in a sole proprietorship, owner investments are not recorded as revenue, any withdrawals are recorded as expenses.

Payment of accounts payable decreases both liabilities and assets.

In Canada, the national organization that has been established to train and monitor its highly qualified professionals to navigate through today's complex and dynamic business climate while demonstrating a commitment to its core values is called

Profit appears on which of the following statement(s)?

If the liabilities of a business increased $65,000 during a period of time and equity in the business decreased $21,000 during the same period, would the assets of the business have increased or decreased? By what amount?

Cash investments by owners are listed on which of the following statement(s)?

The balance sheet can be used in order to assess the creditworthiness of potential customers.

As a rule, revenues should not be recognized in the accounting records until received in cash.

Verifiability ensures that information is complete, neutral and free from error.

How would the accounting equation of Lenore Turner's consulting business be affected by the billing of a client for $2,000 for consulting work completed?

Accounting information is considered to be relevant when it

Non-business organizations often operate educational and religious services for profit.

In the partnership form of business, the owners of a business are called shareholders.

The primary objective of financial accounting is

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters

Exam 1: Accounting in Business

The following information is available for Isla Company for the month of May. How much is the profit for the month?

If the assets of a business increased $9,000 during a period of time and its liabilities increased $5,000 during the same period, equity in the business must have

The balance sheet shows whether or not the firm achieved its primary objective of earning a profit.

The difference between a company's assets and its liabilities, or the residual interest in the assets of an entity that remains after deducting its liabilities, is called

The description of the relationship between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the

Although, in a sole proprietorship, owner investments are not recorded as revenue, any withdrawals are recorded as expenses.

Payment of accounts payable decreases both liabilities and assets.

In Canada, the national organization that has been established to train and monitor its highly qualified professionals to navigate through today's complex and dynamic business climate while demonstrating a commitment to its core values is called

Profit appears on which of the following statement(s)?

If the liabilities of a business increased $65,000 during a period of time and equity in the business decreased $21,000 during the same period, would the assets of the business have increased or decreased? By what amount?

Cash investments by owners are listed on which of the following statement(s)?

The balance sheet can be used in order to assess the creditworthiness of potential customers.

As a rule, revenues should not be recognized in the accounting records until received in cash.

Verifiability ensures that information is complete, neutral and free from error.

How would the accounting equation of Lenore Turner's consulting business be affected by the billing of a client for $2,000 for consulting work completed?

Accounting information is considered to be relevant when it

Non-business organizations often operate educational and religious services for profit.

In the partnership form of business, the owners of a business are called shareholders.

The primary objective of financial accounting is

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters