Question 1

Which of the following is an internal event?

Accepted Answer

A) sale of goods or services 
B) payment of dividends 
C) using raw materials in production 
D) purchase of materials 
A) sale of goods or services 
B) payment of dividends 
C) using raw materials in production 
D) purchase of materials C

Question 2

An unearned revenue can best be described as an amount

Accepted Answer

A) collected and currently matched with expenses. 
B) collected and not currently matched with expenses. 
C) not collected and currently matched with expenses. 
D) not collected and not currently matched with expenses. 
A) collected and currently matched with expenses. 
B) collected and not currently matched with expenses. 
C) not collected and currently matched with expenses. 
D) not collected and not currently matched with expenses. B

Question 3

SEQ CHAPTER \h \r 1The account credited for a receipt of cash on account is

Accepted Answer

A) Cash. 
B) Service Revenue. 
C) Accounts Receivable. 
D) Accounts Payable. 
A) Cash. 
B) Service Revenue. 
C) Accounts Receivable. 
D) Accounts Payable. C

Question 4

Which of the following must be considered in estimating depreciation on an asset for an accounting period?

Accepted Answer

A) only the original cost of the asset 
B) only the asset's useful life 
C) both the original cost of the asset and its useful life 
D) the decline in its fair market value 
A) only the original cost of the asset 
B) only the asset's useful life 
C) both the original cost of the asset and its useful life 
D) the decline in its fair market value

Question 5

SEQ CHAPTER \h \r 1Which of the following equations is correct?

Accepted Answer

A) Assets plus Liabilities = Equity. 
B) Assets = Liabilities minus Equity. 
C) Liabilities = Assets plus Equity. 
D) Equity = Assets minus Liabilities. 
A) Assets plus Liabilities = Equity. 
B) Assets = Liabilities minus Equity. 
C) Liabilities = Assets plus Equity. 
D) Equity = Assets minus Liabilities.

Question 6

Lime Limited has received its invoice for $75,000 for property taxes for the calendar year 2017.The invoice was received and paid in June 2014 and the entire amount was debited to Property Tax Expense.Assuming Lime does NOT prepare interim financial statements, the required adjustment on December 31, 2017 related to the property taxes is

Accepted Answer

A) debit Property Tax Expense and credit Prepaid Property Tax $31,250. 
B) debit Prepaid Property Tax and credit Property Tax Expense $37,500. 
C) debit Property Tax Expense and credit Prepaid Property Tax $37,500. 
D) Silly question: no adjusting entry is required. 
A) debit Property Tax Expense and credit Prepaid Property Tax $31,250. 
B) debit Prepaid Property Tax and credit Property Tax Expense $37,500. 
C) debit Property Tax Expense and credit Prepaid Property Tax $37,500. 
D) Silly question: no adjusting entry is required.

Question 7

A trial balance will NOT balance if

Accepted Answer

A) an amount is posted to the wrong account. 
B) a transaction has been entered twice. 
C) a transaction has been omitted. 
D) only the debit side of a journal entry has been posted. 
A) an amount is posted to the wrong account. 
B) a transaction has been entered twice. 
C) a transaction has been omitted. 
D) only the debit side of a journal entry has been posted.

Question 8

Some events are NOT recorded in the accounting information system because

Accepted Answer

A) the service has been provided but the cash has not yet been received. 
B) the service has not been provided but the cash has already been received. 
C) their measurement is too complex. 
D) the amounts are not material. 
A) the service has been provided but the cash has not yet been received. 
B) the service has not been provided but the cash has already been received. 
C) their measurement is too complex. 
D) the amounts are not material.

Question 9

In the closing process, all the revenue and expense accounts are transferred to a clearing or suspense account called

Accepted Answer

A) Other Comprehensive Income. 
B) Common Shares. 
C) Retained Earnings. 
D) Income Summary. 
A) Other Comprehensive Income. 
B) Common Shares. 
C) Retained Earnings. 
D) Income Summary.

Question 10

On November 1, 2017, Green Corp.purchased equipment by signing a 5-month, 7% note for $120,000.The December 31, 2017 adjusting entry required in connection with this note is

Accepted Answer

A) debit Interest Expense and credit Interest Payable, $8,400. 
B) debit Interest Expense and credit Interest Payable, $3,500. 
C) debit Interest Expense and credit Interest Payable, $1,400. 
D) debit Interest Expense and credit Cash, $1,400. 
A) debit Interest Expense and credit Interest Payable, $8,400. 
B) debit Interest Expense and credit Interest Payable, $3,500. 
C) debit Interest Expense and credit Interest Payable, $1,400. 
D) debit Interest Expense and credit Cash, $1,400.

Question 11

Zack Jones operates a sole proprietorship, selling sporting equipment.He has recently prepared financial statements for the fiscal year end of the business.Which equity accounts would you expect to see on the balance sheet?

Accepted Answer

A) Common Shares, Dividends, and Owner's Equity 
B) Common Shares, Capital, and Withdrawals 
C) Capital and Withdrawals, grouped or added under Owner's Equity 
D) Owner's Equity and Dividends, netted together as Retained Earnings 
A) Common Shares, Dividends, and Owner's Equity 
B) Common Shares, Capital, and Withdrawals 
C) Capital and Withdrawals, grouped or added under Owner's Equity 
D) Owner's Equity and Dividends, netted together as Retained Earnings

Question 12

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

Accepted Answer

A) a liability account and an asset account. 
B) an asset or contra-asset and an expense account. 
C) a liability account and an expense account. 
D) a receivable account and a revenue account. 
A) a liability account and an asset account. 
B) an asset or contra-asset and an expense account. 
C) a liability account and an expense account. 
D) a receivable account and a revenue account.

Question 13

Under ASPE, Other Comprehensive Income (OCI)and Accumulated Other Comprehensive Income (AOCI)accounts

Accepted Answer

A) appear as separate line items, the same as under IFRS. 
B) are part of accounts such as Fair Value-OCI Investments. 
C) are not included in financial statements. 
D) are measured differently than under IFRS. 
A) appear as separate line items, the same as under IFRS. 
B) are part of accounts such as Fair Value-OCI Investments. 
C) are not included in financial statements. 
D) are measured differently than under IFRS.

Question 14

For adjusting entries relating to accrued revenues,

Accepted Answer

A) a liability-revenue account relationship exists. 
B) the adjusting entry involves a credit to an asset account and a debit to a revenue account. 
C) if an adjustment is not made, assets will be overstated. 
D) before adjustment, both assets and revenues are understated. 
A) a liability-revenue account relationship exists. 
B) the adjusting entry involves a credit to an asset account and a debit to a revenue account. 
C) if an adjustment is not made, assets will be overstated. 
D) before adjustment, both assets and revenues are understated.

Question 15

Use the following information for questions.
  
-The cash paid for salaries during 2017 was

Accepted Answer

A) $67,600. 
B) $72,000. 
C) $77,400. 
D) $81,800. 
A) $67,600. 
B) $72,000. 
C) $77,400. 
D) $81,800.

Question 16

If the accountant forgets to record an adjustment for Accumulated Depreciation, Building at the end of the accounting period, this will cause

Accepted Answer

A) an overstatement of assets. 
B) an understatement of assets. 
C) an overstatement of expenses. 
D) an overstatement of liabilities. 
A) an overstatement of assets. 
B) an understatement of assets. 
C) an overstatement of expenses. 
D) an overstatement of liabilities.

Question 17

Use the following information for questions.
  
-The cash received for interest during 2017 was

Accepted Answer

A) $78,800. 
B) $84,200. 
C) $82,900. 
D) $74,100. 
A) $78,800. 
B) $84,200. 
C) $82,900. 
D) $74,100.

Question 18

An external event involving a transfer or exchange between two or more entities or parties is called a(n)

Accepted Answer

A) account. 
B) transaction. 
C) ledger. 
D) accounting system. 
A) account. 
B) transaction. 
C) ledger. 
D) accounting system.

Question 19

What account are revenues and expenses transferred to at the end of the accounting cycle?

Accepted Answer

A) Comprehensive Income 
B) Retained Earnings 
C) Accumulated Other Comprehensive Income 
D) Income Summary 
A) Comprehensive Income 
B) Retained Earnings 
C) Accumulated Other Comprehensive Income 
D) Income Summary

Question 20

Marvin holds 10% of the common shares of Pink Limited.For the 2017 fiscal year end, all shareholders received a cash payment to represent their share in the net income of Pink Limited.How would this cash payment be reported in the equity section of Pink Limited's financial statements?

Accepted Answer

A) as a reduction in the Owner's Equity account 
B) as an owner withdrawal, reducing Shareholder's Equity of Pink Limited 
C) as a dividend, reducing Shareholder's Equity of Pink Limited 
D) This payment would not impact the equity section of the financial statements. 
A) as a reduction in the Owner's Equity account 
B) as an owner withdrawal, reducing Shareholder's Equity of Pink Limited 
C) as a dividend, reducing Shareholder's Equity of Pink Limited 
D) This payment would not impact the equity section of the financial statements.

Exam 3: The Accounting Information System and Measurement Issues

Which of the following is an internal event?

An unearned revenue can best be described as an amount

SEQ CHAPTER \h \r 1The account credited for a receipt of cash on account is

Which of the following must be considered in estimating depreciation on an asset for an accounting period?

SEQ CHAPTER \h \r 1Which of the following equations is correct?

A trial balance will NOT balance if

Some events are NOT recorded in the accounting information system because

In the closing process, all the revenue and expense accounts are transferred to a clearing or suspense account called

On November 1, 2017, Green Corp.purchased equipment by signing a 5-month, 7% note for $120,000.The December 31, 2017 adjusting entry required in connection with this note is

Zack Jones operates a sole proprietorship, selling sporting equipment.He has recently prepared financial statements for the fiscal year end of the business.Which equity accounts would you expect to see on the balance sheet?

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

Under ASPE, Other Comprehensive Income (OCI)and Accumulated Other Comprehensive Income (AOCI)accounts

For adjusting entries relating to accrued revenues,

Use the following information for questions. -The cash paid for salaries during 2017 was

If the accountant forgets to record an adjustment for Accumulated Depreciation, Building at the end of the accounting period, this will cause

Use the following information for questions. -The cash received for interest during 2017 was

An external event involving a transfer or exchange between two or more entities or parties is called a(n)

What account are revenues and expenses transferred to at the end of the accounting cycle?

Marvin holds 10% of the common shares of Pink Limited.For the 2017 fiscal year end, all shareholders received a cash payment to represent their share in the net income of Pink Limited.How would this cash payment be reported in the equity section of Pink Limited's financial statements?

The Canadian Financial Reporting Environment

Conceptual Framework Underlying Financial Reporting

Reporting Financial Performance

Financial Position and Cash Flows

Revenue Recognition

Cash and Receivables

Inventory

Investments

Property, Plant, and Equipment: Accounting Model Basics

Depreciation, Impairment, and Disposition

Intangible Assets and Goodwill

Non-Financial Andcurrent Liabilities

Long-Term Financial Liabilities

Shareholders Equity

Complex Financial Instruments

Earnings Per Share

Income Taxes

Pensions and Other Employee Future Benefits

Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Other Measurement and Disclosure Issues

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