Question 1

What are the three types of assets that will typically be found on a balance sheet?

Accepted Answer

A) Local,national,and international 
B) Positive,negative,and neutral 
C) Land,buildings,and equipment 
D) Current,fixed,and intangible 
E) Short term,long term,and medium term 
A) Local,national,and international 
B) Positive,negative,and neutral 
C) Land,buildings,and equipment 
D) Current,fixed,and intangible 
E) Short term,long term,and medium term

Question 2

Gem Corp.has $100 million in assets and $50 million in liabilities.Last year,the company earned $10 million in net profit and paid out $5 million in dividends to shareholders.What are the retained earnings for the company?

Accepted Answer

A) $50 million 
B) $5 million 
C) $45 million 
D) $90 million 
E) $95 million 
A) $50 million 
B) $5 million 
C) $45 million 
D) $90 million 
E) $95 million

Question 3

Financial and managerial accounting are differentiated based on the different users they serve.

Accepted Answer

A) True 
 B)False

Question 4

A current liability is

Accepted Answer

A) additional money,above proceeds from a stock sale,paid directly to a firm by its owners. 
B) the process of distributing the cost of an asset over its useful life. 
C) the amount paid for an existing business above the value of its other assets. 
D) a debt that is not due for at least one year. 
E) a debt that must be paid within the year. 
A) additional money,above proceeds from a stock sale,paid directly to a firm by its owners. 
B) the process of distributing the cost of an asset over its useful life. 
C) the amount paid for an existing business above the value of its other assets. 
D) a debt that is not due for at least one year. 
E) a debt that must be paid within the year.

Question 5

Which of the following ensures that the accounting equation is always kept in balance?

Accepted Answer

A) Credits 
B) Debits 
C) Double-entry accounting 
D) Balance sheet 
E) T-accounts 
A) Credits 
B) Debits 
C) Double-entry accounting 
D) Balance sheet 
E) T-accounts

Question 6

The accounting method for distributing the cost of an asset over its useful life is called retained earnings.

Accepted Answer

A) True 
 B)False

Question 7

How much profit does a company (which has a total of $5 million invested by its owners and $4 million in liabilities)need to make in order to have an assets-to-liabilities ratio of 2:1?

Accepted Answer

A) $2 million 
B) $3 million 
C) $5 million 
D) $7 million 
E) $8 million 
A) $2 million 
B) $3 million 
C) $5 million 
D) $7 million 
E) $8 million

Question 8

The equity that a homeowner has in a house is the amount of money that could be made by selling the house and paying off the mortgage.This idea is like the idea of owners' equity in a business.

Accepted Answer

A) True 
 B)False

Question 9

Cash and other assets that can be converted into cash within a year are called current assets.

Accepted Answer

A) True 
 B)False

Question 10

The field of accounting that serves internal users of a company's financial information is

Accepted Answer

A) financial accounting. 
B) auditing. 
C) public accounting. 
D) bookkeeping. 
E) managerial accounting. 
A) financial accounting. 
B) auditing. 
C) public accounting. 
D) bookkeeping. 
E) managerial accounting.

Question 11

Anything of economic value owned by a firm or individual is an asset.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is correct with respect to generally accepted accounting principles?

Accepted Answer

A) Public and private businesses can no longer use generally accepted accounting principles. 
B) They are used in many foreign countries but not in Canada. 
C) Public companies in Canada have moved away from using generally accepted accounting principles and have adopted International Financial Reporting Standards (IFRS). 
D) Private companies must use the new International Financial Reporting Standards (IFRS). 
E) None of these statements is correct. 
A) Public and private businesses can no longer use generally accepted accounting principles. 
B) They are used in many foreign countries but not in Canada. 
C) Public companies in Canada have moved away from using generally accepted accounting principles and have adopted International Financial Reporting Standards (IFRS). 
D) Private companies must use the new International Financial Reporting Standards (IFRS). 
E) None of these statements is correct.

Question 13

________ are amounts due from customers who have purchased goods on credit.

Accepted Answer

A) Accounts owed 
B) Accounts receivable 
C) Accounts forwarded 
D) Accounts payable 
E) Account balances 
A) Accounts owed 
B) Accounts receivable 
C) Accounts forwarded 
D) Accounts payable 
E) Account balances

Question 14

What do activity ratios show?

Accepted Answer

Activity ratios meas

Question 15

Owners' equity consists of two sources of capital.What are they?

Accepted Answer

This figure includes the amoun

Question 16

Bookkeeping is basically the recording of accounting transactions.

Accepted Answer

A) True 
 B)False

Question 17

What is the difference between current and long-term liabilities?

Accepted Answer

Current liabilities are debts

Question 18

Accountants have historically used generally accepted accounting principles when preparing financial reports,but many companies have now switched to the new international accounting standards.

Accepted Answer

A) True 
 B)False

Question 19

What is a statement of cash flows?

Accepted Answer

A statement of cash

Question 20

A solvency ratio is an activity ratio that measures the average number of times inventory is sold and restocked during the year.

Accepted Answer

A) True 
 B)False

What are the three types of assets that will typically be found on a balance sheet?

Gem Corp.has $100 million in assets and $50 million in liabilities.Last year,the company earned $10 million in net profit and paid out $5 million in dividends to shareholders.What are the retained earnings for the company?

Financial and managerial accounting are differentiated based on the different users they serve.

A current liability is

Which of the following ensures that the accounting equation is always kept in balance?

The accounting method for distributing the cost of an asset over its useful life is called retained earnings.

How much profit does a company (which has a total of $5 million invested by its owners and $4 million in liabilities)need to make in order to have an assets-to-liabilities ratio of 2:1?

The equity that a homeowner has in a house is the amount of money that could be made by selling the house and paying off the mortgage.This idea is like the idea of owners' equity in a business.

Cash and other assets that can be converted into cash within a year are called current assets.

The field of accounting that serves internal users of a company's financial information is

Anything of economic value owned by a firm or individual is an asset.

Which of the following is correct with respect to generally accepted accounting principles?

________ are amounts due from customers who have purchased goods on credit.

What do activity ratios show?

Owners' equity consists of two sources of capital.What are they?

Bookkeeping is basically the recording of accounting transactions.

What is the difference between current and long-term liabilities?

Accountants have historically used generally accepted accounting principles when preparing financial reports,but many companies have now switched to the new international accounting standards.

What is a statement of cash flows?

A solvency ratio is an activity ratio that measures the average number of times inventory is sold and restocked during the year.

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship,small Business,and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating,satisfying,and Leading Employees

Operations Management,productivity,and Quality

Understanding Marketing Principles and Developing Products

Pricing,promoting,and Distributing Products

Money and Banking

Financial Decisions and Risk Management

Filters

Exam 11: Understanding Accounting

What are the three types of assets that will typically be found on a balance sheet?

Gem Corp.has $100 million in assets and $50 million in liabilities.Last year,the company earned $10 million in net profit and paid out $5 million in dividends to shareholders.What are the retained earnings for the company?

Financial and managerial accounting are differentiated based on the different users they serve.

A current liability is

Which of the following ensures that the accounting equation is always kept in balance?

The accounting method for distributing the cost of an asset over its useful life is called retained earnings.

How much profit does a company (which has a total of $5 million invested by its owners and $4 million in liabilities)need to make in order to have an assets-to-liabilities ratio of 2:1?

The equity that a homeowner has in a house is the amount of money that could be made by selling the house and paying off the mortgage.This idea is like the idea of owners' equity in a business.

Cash and other assets that can be converted into cash within a year are called current assets.

The field of accounting that serves internal users of a company's financial information is

Anything of economic value owned by a firm or individual is an asset.

Which of the following is correct with respect to generally accepted accounting principles?

________ are amounts due from customers who have purchased goods on credit.

What do activity ratios show?

Owners' equity consists of two sources of capital.What are they?

Bookkeeping is basically the recording of accounting transactions.

What is the difference between current and long-term liabilities?

Accountants have historically used generally accepted accounting principles when preparing financial reports,but many companies have now switched to the new international accounting standards.

What is a statement of cash flows?

A solvency ratio is an activity ratio that measures the average number of times inventory is sold and restocked during the year.

Understanding the Canadian Business System

The Environment of Business

Conducting Business Ethically and Responsibly

Entrepreneurship,small Business,and New Venture Creation

The Global Context of Business

Managing the Business Enterprise

Organizing the Business Enterprise

Managing Human Resources and Labour Relations

Motivating,satisfying,and Leading Employees

Operations Management,productivity,and Quality

Understanding Marketing Principles and Developing Products

Pricing,promoting,and Distributing Products

Money and Banking

Financial Decisions and Risk Management

Filters