Question 1

The accounting basis that attempts to measure performance in the period in which it occurred is the

Accepted Answer

A) approval basis. 
B) cash basis. 
C) matching basis. 
D) accrual basis. 
A) approval basis. 
B) cash basis. 
C) matching basis. 
D) accrual basis.

Question 2

A significant limitation of the template method is the lack of specific retained earnings and dividends declared accounts.

Accepted Answer

A) True 
 B)False

Question 3

If a vehicle was purchased for $6,500 and has a residual value of $500,the annual depreciation expense will be $1,000 if the estimated useful life is

Accepted Answer

A) 6 years. 
B) 6.5 years. 
C) 7 years. 
D) 13 years. 
A) 6 years. 
B) 6.5 years. 
C) 7 years. 
D) 13 years.

Question 4

A declaration of dividends results in an increase in liabilities and a decrease in shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 5

The purchase of equipment costing $19,500 for $1,500 down (with the balance on account)will increase both sides of the Statement of Financial Position by $18,000.

Accepted Answer

A) True 
 B)False

Question 6

Information has predictive value if it provides feedback to users on their previous assessments of the company.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would be the effect of a transaction to record the portion of prepaid rent that has expired in a period?

Accepted Answer

A) increase Prepaid Rent,decrease Rent Expense 
B) increase Rent Expense,decrease Cash 
C) increase Prepaid Rent,decrease Cash 
D) increase Rent Expense,decrease Prepaid Rent 
A) increase Prepaid Rent,decrease Rent Expense 
B) increase Rent Expense,decrease Cash 
C) increase Prepaid Rent,decrease Cash 
D) increase Rent Expense,decrease Prepaid Rent

Question 8

The sale of merchandise to a customer partly for cash and partly on account would require which of the following?

Accepted Answer

A) increase in Accounts Receivable,increase in Cash,increase in Sales Revenue 
B) increase in Cash,decrease in Accounts Payable,increase in Sales Revenue 
C) increase in Cash,increase in Sales Revenue 
D) decrease in Accounts Payable,increase in Accounts Receivable,increase in Sales Revenue 
A) increase in Accounts Receivable,increase in Cash,increase in Sales Revenue 
B) increase in Cash,decrease in Accounts Payable,increase in Sales Revenue 
C) increase in Cash,increase in Sales Revenue 
D) decrease in Accounts Payable,increase in Accounts Receivable,increase in Sales Revenue

Question 9

The profit margin ratio = sales ÷ net income.

Accepted Answer

A) True 
 B)False

Question 10

The purchase of land for a combination of cash and issuance of shares would require which of the following?

Accepted Answer

A) increase in Land,increase in Common shares,increase in Cash 
B) increase in Cash,decrease in Common shares,decrease in Land 
C) increase in Land,increase in Common shares 
D) increase in Land,increase in Common shares,decrease in Cash 
A) increase in Land,increase in Common shares,increase in Cash 
B) increase in Cash,decrease in Common shares,decrease in Land 
C) increase in Land,increase in Common shares 
D) increase in Land,increase in Common shares,decrease in Cash

Question 11

The asset that results when a customer buys goods or services on credit is

Accepted Answer

A) Accounts receivable. 
B) Accounts payable. 
C) Notes receivable. 
D) Cash. 
A) Accounts receivable. 
B) Accounts payable. 
C) Notes receivable. 
D) Cash.

Question 12

Which of the following would be the most useful in determining if a company has sufficient resources to continue operations in the short-term?

Accepted Answer

A) the profit margin ratio 
B) the return on assets ratio 
C) the cash from operating activities 
D) the cash from financing activities 
A) the profit margin ratio 
B) the return on assets ratio 
C) the cash from operating activities 
D) the cash from financing activities

Question 13

The return on assets = net income ÷ average total assets.

Accepted Answer

A) True 
 B)False

Question 14

The accounting standards that publicly traded companies in Canada must adhere to are

Accepted Answer

A) International Financial Reporting Standards. 
B) Accounting Standards for Private Enterprise. 
C) Canada Revenue Agency Standards. 
D) all of the above 
A) International Financial Reporting Standards. 
B) Accounting Standards for Private Enterprise. 
C) Canada Revenue Agency Standards. 
D) all of the above

Question 15

Which of the following will not appear on the Statement of Income?

Accepted Answer

A) depreciation 
B) interest 
C) cost of goods sold 
D) dividends declared 
A) depreciation 
B) interest 
C) cost of goods sold 
D) dividends declared

Question 16

Which of the following expenses has no effect on the cash flow of a firm?

Accepted Answer

A) salaries expense 
B) interest expense 
C) depreciation expense 
D) cost of goods sold 
A) salaries expense 
B) interest expense 
C) depreciation expense 
D) cost of goods sold

Question 17

How are goods that are purchased for resale at a later date recorded in the financial statements?

Accepted Answer

A) as inventory 
B) as prepaid expenses 
C) as cost of goods sold 
D) as operating expenses 
A) as inventory 
B) as prepaid expenses 
C) as cost of goods sold 
D) as operating expenses

Question 18

The benefits of reporting financial information must exceed the costs of doing so,according to which characteristic of financial information?

Accepted Answer

A) the concept of materiality 
B) faithful representation 
C) cost constraint 
D) verifiability 
A) the concept of materiality 
B) faithful representation 
C) cost constraint 
D) verifiability

Question 19

The sales of merchandise on credit will cause the retained earnings and long-term liabilities accounts to increase.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following assets is never expensed on the Statement of Income?

Accepted Answer

A) land 
B) building 
C) inventory 
D) equipment 
A) land 
B) building 
C) inventory 
D) equipment

The accounting basis that attempts to measure performance in the period in which it occurred is the

A significant limitation of the template method is the lack of specific retained earnings and dividends declared accounts.

If a vehicle was purchased for $6,500 and has a residual value of $500,the annual depreciation expense will be $1,000 if the estimated useful life is

A declaration of dividends results in an increase in liabilities and a decrease in shareholders' equity.

The purchase of equipment costing $19,500 for $1,500 down (with the balance on account)will increase both sides of the Statement of Financial Position by $18,000.

Information has predictive value if it provides feedback to users on their previous assessments of the company.

Which of the following would be the effect of a transaction to record the portion of prepaid rent that has expired in a period?

The sale of merchandise to a customer partly for cash and partly on account would require which of the following?

The profit margin ratio = sales ÷ net income.

The purchase of land for a combination of cash and issuance of shares would require which of the following?

The asset that results when a customer buys goods or services on credit is

Which of the following would be the most useful in determining if a company has sufficient resources to continue operations in the short-term?

The return on assets = net income ÷ average total assets.

The accounting standards that publicly traded companies in Canada must adhere to are

Which of the following will not appear on the Statement of Income?

Which of the following expenses has no effect on the cash flow of a firm?

How are goods that are purchased for resale at a later date recorded in the financial statements?

The benefits of reporting financial information must exceed the costs of doing so,according to which characteristic of financial information?

The sales of merchandise on credit will cause the retained earnings and long-term liabilities accounts to increase.

Which of the following assets is never expensed on the Statement of Income?

Overview of Corporate Financial Reporting

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

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Exam 2: Analyzing Transaction and Their Effect on Financial Statement

The accounting basis that attempts to measure performance in the period in which it occurred is the

A significant limitation of the template method is the lack of specific retained earnings and dividends declared accounts.

If a vehicle was purchased for $6,500 and has a residual value of $500,the annual depreciation expense will be $1,000 if the estimated useful life is

A declaration of dividends results in an increase in liabilities and a decrease in shareholders' equity.

The purchase of equipment costing $19,500 for $1,500 down (with the balance on account)will increase both sides of the Statement of Financial Position by $18,000.

Information has predictive value if it provides feedback to users on their previous assessments of the company.

Which of the following would be the effect of a transaction to record the portion of prepaid rent that has expired in a period?

The sale of merchandise to a customer partly for cash and partly on account would require which of the following?

The profit margin ratio = sales ÷ net income.

The purchase of land for a combination of cash and issuance of shares would require which of the following?

The asset that results when a customer buys goods or services on credit is

Which of the following would be the most useful in determining if a company has sufficient resources to continue operations in the short-term?

The return on assets = net income ÷ average total assets.

The accounting standards that publicly traded companies in Canada must adhere to are

Which of the following will not appear on the Statement of Income?

Which of the following expenses has no effect on the cash flow of a firm?

How are goods that are purchased for resale at a later date recorded in the financial statements?

The benefits of reporting financial information must exceed the costs of doing so,according to which characteristic of financial information?

The sales of merchandise on credit will cause the retained earnings and long-term liabilities accounts to increase.

Which of the following assets is never expensed on the Statement of Income?

Overview of Corporate Financial Reporting

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

Filters