Question 1

A Balance sheet can also be called a Statement of financial position.

Accepted Answer

A) True 
 B)False  True

Question 2

Ingrid Ltd. and Bulgar Equipment Rentals company sign a contract to rent equipment in the next two years. What is the impact on the accounting equation?

Accepted Answer

A)  Assets increase and liabilities increase. 
B)  Assets decrease and liabilities decrease. 
C)  No impact on the accounting equation. 
D)  Owner's equity increases and assets decrease. 
A)  Assets increase and liabilities increase. 
B)  Assets decrease and liabilities decrease. 
C)  No impact on the accounting equation. 
D)  Owner's equity increases and assets decrease. C

Question 3

If the owner's equity account increases from the beginning of the year to the end of the year, the best explanation for this change is

Accepted Answer

A)  profit is less than owner drawings. 
B)  a loss is less than owner drawings. 
C)  additional owner investments are less than a loss. 
D)  profit is greater than owner drawings. 
A)  profit is less than owner drawings. 
B)  a loss is less than owner drawings. 
C)  additional owner investments are less than a loss. 
D)  profit is greater than owner drawings. D

Question 4

Which of the following would violate the reporting entity concept?

Accepted Answer

A)  reporting amounts owed to the company's suppliers as a liability on the balance sheet 
B)  reporting equipment owned and used in the business as an asset in the balance sheet 
C)  reporting withdrawals by the owner as a drawing in the Statement of owner's equity 
D)  reporting the owner's personal sailboat as an asset on the balance sheet 
A)  reporting amounts owed to the company's suppliers as a liability on the balance sheet 
B)  reporting equipment owned and used in the business as an asset in the balance sheet 
C)  reporting withdrawals by the owner as a drawing in the Statement of owner's equity 
D)  reporting the owner's personal sailboat as an asset on the balance sheet

Question 5

Revenues decrease owner's equity and expenses increase owner's equity.

Accepted Answer

A) True 
 B)False

Question 6

In terms of the expanded accounting equation the Income statement is prepared from the data in the

Accepted Answer

A)  assets column. 
B)  liabilities column. 
C)  owner's equity column. 
D)  liabilities and owner's equity column. 
A)  assets column. 
B)  liabilities column. 
C)  owner's equity column. 
D)  liabilities and owner's equity column.

Question 7

Revenues, in a proprietorship, are

Accepted Answer

A)  the cost of assets consumed during the period. 
B)  the gross increases in owner's equity resulting from business activities. 
C)  the cost of services used during the period. 
D)  actual or expected cash outflows. 
A)  the cost of assets consumed during the period. 
B)  the gross increases in owner's equity resulting from business activities. 
C)  the cost of services used during the period. 
D)  actual or expected cash outflows.

Question 8

A working knowledge of accounting can be useful to doctors or lawyers.

Accepted Answer

A) True 
 B)False

Question 9

The International Accounting Standards Board

Accepted Answer

A)  works to reduce differences in accounting practices across countries. 
B)  promotes unique accounting applications. 
C)  works to increase differences in accounting practices across countries. 
D)  only operates in countries which speak English. 
A)  works to reduce differences in accounting practices across countries. 
B)  promotes unique accounting applications. 
C)  works to increase differences in accounting practices across countries. 
D)  only operates in countries which speak English.

Question 10

Payment of a liability for an expense that has been previously recorded

Accepted Answer

A)  does not affect the owner's equity account. 
B)  only affects the liability accounts. 
C)  does not affect the asset accounts. 
D)  only affects the asset accounts. 
A)  does not affect the owner's equity account. 
B)  only affects the liability accounts. 
C)  does not affect the asset accounts. 
D)  only affects the asset accounts.

Question 11

Recognition is the process of recording a transaction in the accounting records.

Accepted Answer

A) True 
 B)False

Question 12

Accounting information is used only by external users with a direct financial interest in a company.

Accepted Answer

A) True 
 B)False

Question 13

A Cash flow statement is organized into three categories, operating, financing and investing activities of the company.

Accepted Answer

A) True 
 B)False

Question 14

Owner's equity, in a proprietorship, is increased by

Accepted Answer

A)  drawings. 
B)  revenues. 
C)  expenses. 
D)  liabilities. 
A)  drawings. 
B)  revenues. 
C)  expenses. 
D)  liabilities.

Question 15

Partners' equity, in a partnership, is decreased by

Accepted Answer

A)  payment of dividends. 
B)  drawings. 
C)  owner's investments. 
D)  revenues. 
A)  payment of dividends. 
B)  drawings. 
C)  owner's investments. 
D)  revenues.

Question 16

An Income statement will give the answer to the question - "where did all the cash get used during this month?"

Accepted Answer

A) True 
 B)False

Question 17

An external user would NOT include

Accepted Answer

A)  a creditor of the company. 
B)  Canada Revenue Agency. 
C)  an employee. 
D)  the company's bank. 
A)  a creditor of the company. 
B)  Canada Revenue Agency. 
C)  an employee. 
D)  the company's bank.

Question 18

A corporation may be formed under either the provincial legislation or the federal legislation.

Accepted Answer

A) True 
 B)False

Question 19

A balance sheet, in a proprietorship, shows

Accepted Answer

A)  revenues, liabilities, and owner's equity. 
B)  expenses, drawings, and owner's equity. 
C)  revenues, expenses, and drawings. 
D)  assets, liabilities, and owner's equity. 
A)  revenues, liabilities, and owner's equity. 
B)  expenses, drawings, and owner's equity. 
C)  revenues, expenses, and drawings. 
D)  assets, liabilities, and owner's equity.

Question 20

Which of the following would be considered an internal user of accounting data for the ABC Company?

Accepted Answer

A)  president of the company 
B)  production manager 
C)  merchandise inventory clerk 
D)  all of the above 
A)  president of the company 
B)  production manager 
C)  merchandise inventory clerk 
D)  all of the above

A Balance sheet can also be called a Statement of financial position.

Ingrid Ltd. and Bulgar Equipment Rentals company sign a contract to rent equipment in the next two years. What is the impact on the accounting equation?

If the owner's equity account increases from the beginning of the year to the end of the year, the best explanation for this change is

Which of the following would violate the reporting entity concept?

Revenues decrease owner's equity and expenses increase owner's equity.

In terms of the expanded accounting equation the Income statement is prepared from the data in the

Revenues, in a proprietorship, are

A working knowledge of accounting can be useful to doctors or lawyers.

The International Accounting Standards Board

Payment of a liability for an expense that has been previously recorded

Recognition is the process of recording a transaction in the accounting records.

Accounting information is used only by external users with a direct financial interest in a company.

A Cash flow statement is organized into three categories, operating, financing and investing activities of the company.

Owner's equity, in a proprietorship, is increased by

Partners' equity, in a partnership, is decreased by

An Income statement will give the answer to the question - "where did all the cash get used during this month?"

An external user would NOT include

A corporation may be formed under either the provincial legislation or the federal legislation.

A balance sheet, in a proprietorship, shows

Which of the following would be considered an internal user of accounting data for the ABC Company?

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Inventory Costing

Internal Control and Cash

Accounting for Receivables

Long-Lived Assets

Current Liabilities and Payroll

Filters

Exam 1: Accounting in Action

A Balance sheet can also be called a Statement of financial position.

Ingrid Ltd. and Bulgar Equipment Rentals company sign a contract to rent equipment in the next two years. What is the impact on the accounting equation?

If the owner's equity account increases from the beginning of the year to the end of the year, the best explanation for this change is

Which of the following would violate the reporting entity concept?

Revenues decrease owner's equity and expenses increase owner's equity.

In terms of the expanded accounting equation the Income statement is prepared from the data in the

Revenues, in a proprietorship, are

A working knowledge of accounting can be useful to doctors or lawyers.

The International Accounting Standards Board

Payment of a liability for an expense that has been previously recorded

Recognition is the process of recording a transaction in the accounting records.

Accounting information is used only by external users with a direct financial interest in a company.

A Cash flow statement is organized into three categories, operating, financing and investing activities of the company.

Owner's equity, in a proprietorship, is increased by

Partners' equity, in a partnership, is decreased by

An Income statement will give the answer to the question - "where did all the cash get used during this month?"

An external user would NOT include

A corporation may be formed under either the provincial legislation or the federal legislation.

A balance sheet, in a proprietorship, shows

Which of the following would be considered an internal user of accounting data for the ABC Company?

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Inventory Costing

Internal Control and Cash

Accounting for Receivables

Long-Lived Assets

Current Liabilities and Payroll

Filters