Question 1

If accounting information has predictive value, it is useful in making predictions about

Accepted Answer

A)  the potential effects of past, present, and future events of a company. 
B)  future Canada Revenue Agency audits. 
C)  foreign currency exchange rates. 
D)  new accounting principles. 
A)  the potential effects of past, present, and future events of a company. 
B)  future Canada Revenue Agency audits. 
C)  foreign currency exchange rates. 
D)  new accounting principles.

Question 2

In comparing Walmart to Sears, Walmart would be a better example of a low-cost strategy company that relies on efficient asset management to keep costs low and investment in assets low.

Accepted Answer

A) True 
 B)False

Question 3

Shareholders are most interested in evaluating

Accepted Answer

A)  liquidity and profitability. 
B)  marketability and solvency. 
C)  profitability and solvency. 
D)  liquidity and solvency. 
A)  liquidity and profitability. 
B)  marketability and solvency. 
C)  profitability and solvency. 
D)  liquidity and solvency.

Question 4

Qualitative characteristics help ensure that the information provided in financial statements is useful.

Accepted Answer

A) True 
 B)False

Question 5

The elements of comprehensive income would include all of the following items except

Accepted Answer

A)  Net earnings, as reported on the income statement. 
B)  Unrealized gains or losses on financial assets that are classified as available for sale. 
C)  Unearned revenue 
D)  Unrealized gains or losses on translating the financial statements of companies that have operations in other countries, but are controlled by the Canadian reporting entity. 
A)  Net earnings, as reported on the income statement. 
B)  Unrealized gains or losses on financial assets that are classified as available for sale. 
C)  Unearned revenue 
D)  Unrealized gains or losses on translating the financial statements of companies that have operations in other countries, but are controlled by the Canadian reporting entity.

Question 6

The dollar amount of share capital is:

Accepted Answer

A)  $236,000 
B)  $406,000 
C)  $140,000 
D)  $96,000 
A)  $236,000 
B)  $406,000 
C)  $140,000 
D)  $96,000

Question 7

Ramstetter, Inc. purchased a piece of land with a new building on January 1, 20A. The land was valued at $40,000 and the building was valued at $120,000 with a 40 year life and a zero salvage (residual) value. How would the land and building appear in the plant, property and equipment section of the December 31, 20A statement of financial position?

Accepted Answer

A)  Land at $40,000 less accumulated depreciation of $1,000; Building at $120,000 less accumulated depreciation of $3,000. 
B)  Land at $40,000; Building at $120,000 less accumulated depreciation of $3,000. 
C)  Land at $40,000; Building at $120,000. 
D)  Land at $30,000; Building at $120,000. 
A)  Land at $40,000 less accumulated depreciation of $1,000; Building at $120,000 less accumulated depreciation of $3,000. 
B)  Land at $40,000; Building at $120,000 less accumulated depreciation of $3,000. 
C)  Land at $40,000; Building at $120,000. 
D)  Land at $30,000; Building at $120,000.

Question 8

The relationship between current assets and current liabilities is important in evaluating a company's

Accepted Answer

A)  fair value. 
B)  liquidity. 
C)  solvency. 
D)  profitability. 
A)  fair value. 
B)  liquidity. 
C)  solvency. 
D)  profitability.

Question 9

The indirect and direct methods of preparing the cash flow statement are identical except for the

Accepted Answer

A)  operating activities section. 
B)  investing activities section. 
C)  financing activities section. 
D)  significant noncash activity section. 
A)  operating activities section. 
B)  investing activities section. 
C)  financing activities section. 
D)  significant noncash activity section.

Question 10

Which of the following is not classified as a current asset?

Accepted Answer

A)  Equipment with an estimated useful life of five years. 
B)  Short-term (trading) investments. 
C)  Supplies. 
D)  Cash. 
A)  Equipment with an estimated useful life of five years. 
B)  Short-term (trading) investments. 
C)  Supplies. 
D)  Cash.

Question 11

The first footnote to the financial statements provides a summary of significant accounting policies.

Accepted Answer

A) True 
 B)False

Question 12

Amounts invested in the shares and bonds of other companies (to be held for more than a year) are included as long-term investments in the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 13

On a classified statement of financial position, current assets are customarily listed

Accepted Answer

A)  in alphabetical order. 
B)  with the largest dollar amounts first. 
C)  in the order of acquisition. 
D)  in the order in which they are expected to be converted into cash. 
A)  in alphabetical order. 
B)  with the largest dollar amounts first. 
C)  in the order of acquisition. 
D)  in the order in which they are expected to be converted into cash.

Question 14

Which one of the following is a fundamental qualitative characteristic?

Accepted Answer

A)  Relevance. 
B)  Understandability. 
C)  Comparability. 
D)  Timeliness. 
A)  Relevance. 
B)  Understandability. 
C)  Comparability. 
D)  Timeliness.

Question 15

Which of the following is true about gross profit (gross margin)?

Accepted Answer

A)  It is net sales minus all expenses. 
B)  It is a separate account in the general ledger. 
C)  It is net sales minus cost of goods sold. 
D)  It is sales plus cost of goods sold. 
A)  It is net sales minus all expenses. 
B)  It is a separate account in the general ledger. 
C)  It is net sales minus cost of goods sold. 
D)  It is sales plus cost of goods sold.

Question 16

The return on assets ratio will be greater than the rate of return on equity if the company has been successful in trading on the equity.

Accepted Answer

A) True 
 B)False

Question 17

Wilburn Company collected $100,000 from customers and paid employees and suppliers $90,000 during 20A. In addition, the company borrowed $30,000 from the bank and purchased equipment for $20,000. The company's 20A statement of cash flows would show which of the following?

Accepted Answer

A)  Decrease in cash of $20,000. 
B)  Increase in cash of $30,000. 
C)  Decrease in cash of $30,000. 
D)  Increase in cash of $20,000. 
A)  Decrease in cash of $20,000. 
B)  Increase in cash of $30,000. 
C)  Decrease in cash of $30,000. 
D)  Increase in cash of $20,000.

Question 18

The statement of financial position for Edwards Corporation at December 31, 20C, showed the following subtotals:
   Based on the above data, give the following amounts:

Accepted Answer

A. $125,000 + $380,000 + $50,0

Question 19

Public companies must file additional reports with the securities commissions (e.g., OSC, SEC), which contain more details about the company.

Accepted Answer

A) True 
 B)False

Question 20

Accumulated other comprehensive income would include net unrealized gains or losses on foreign currency translations.

Accepted Answer

A) True 
 B)False

If accounting information has predictive value, it is useful in making predictions about

In comparing Walmart to Sears, Walmart would be a better example of a low-cost strategy company that relies on efficient asset management to keep costs low and investment in assets low.

Shareholders are most interested in evaluating

Qualitative characteristics help ensure that the information provided in financial statements is useful.

The elements of comprehensive income would include all of the following items except

The dollar amount of share capital is:

The relationship between current assets and current liabilities is important in evaluating a company's

The indirect and direct methods of preparing the cash flow statement are identical except for the

Which of the following is not classified as a current asset?

The first footnote to the financial statements provides a summary of significant accounting policies.

Amounts invested in the shares and bonds of other companies (to be held for more than a year) are included as long-term investments in the statement of financial position.

On a classified statement of financial position, current assets are customarily listed

Which one of the following is a fundamental qualitative characteristic?

Which of the following is true about gross profit (gross margin)?

The return on assets ratio will be greater than the rate of return on equity if the company has been successful in trading on the equity.

Wilburn Company collected $100,000 from customers and paid employees and suppliers $90,000 during 20A. In addition, the company borrowed $30,000 from the bank and purchased equipment for $20,000. The company's 20A statement of cash flows would show which of the following?

The statement of financial position for Edwards Corporation at December 31, 20C, showed the following subtotals: Based on the above data, give the following amounts:

Public companies must file additional reports with the securities commissions (e.g., OSC, SEC), which contain more details about the company.

Accumulated other comprehensive income would include net unrealized gains or losses on foreign currency translations.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters

Exam 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash

If accounting information has predictive value, it is useful in making predictions about

In comparing Walmart to Sears, Walmart would be a better example of a low-cost strategy company that relies on efficient asset management to keep costs low and investment in assets low.

Shareholders are most interested in evaluating

Qualitative characteristics help ensure that the information provided in financial statements is useful.

The elements of comprehensive income would include all of the following items except

The dollar amount of share capital is:

The relationship between current assets and current liabilities is important in evaluating a company's

The indirect and direct methods of preparing the cash flow statement are identical except for the

Which of the following is not classified as a current asset?

The first footnote to the financial statements provides a summary of significant accounting policies.

Amounts invested in the shares and bonds of other companies (to be held for more than a year) are included as long-term investments in the statement of financial position.

On a classified statement of financial position, current assets are customarily listed

Which one of the following is a fundamental qualitative characteristic?

Which of the following is true about gross profit (gross margin)?

The return on assets ratio will be greater than the rate of return on equity if the company has been successful in trading on the equity.

Wilburn Company collected $100,000 from customers and paid employees and suppliers $90,000 during 20A. In addition, the company borrowed $30,000 from the bank and purchased equipment for $20,000. The company's 20A statement of cash flows would show which of the following?

The statement of financial position for Edwards Corporation at December 31, 20C, showed the following subtotals: Based on the above data, give the following amounts:

Public companies must file additional reports with the securities commissions (e.g., OSC, SEC), which contain more details about the company.

Accumulated other comprehensive income would include net unrealized gains or losses on foreign currency translations.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments, Financial Statements, and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters