Question 1

Which of the following uses accounting information to determine whether a marketing proposal will be cost effective?

Accepted Answer

A) shareholders 
B) marketing managers 
C) creditors 
D) Human Resource managers 
A) shareholders 
B) marketing managers 
C) creditors 
D) Human Resource managers B

Question 2

An advantage of the corporate form of business is that

Accepted Answer

A) it has limited life. 
B) its shareholders' personal resources are at stake. 
C) its ownership is easily transferable via the sale of shares. 
D) it is simple to establish. 
A) it has limited life. 
B) its shareholders' personal resources are at stake. 
C) its ownership is easily transferable via the sale of shares. 
D) it is simple to establish. C

Question 3

Common shares are reported on

Accepted Answer

A) the statement of financial position. 
B) the statement of changes in equity. 
C) both the statement of financial position and the statement of income. 
D) both the statement of changes in equity and the statement of financial position. 
A) the statement of financial position. 
B) the statement of changes in equity. 
C) both the statement of financial position and the statement of income. 
D) both the statement of changes in equity and the statement of financial position. D

Question 4

Dividends declared are reported on

Accepted Answer

A) the statement of income. 
B) the statement of changes in equity. 
C) the statement of financial position. 
D) both the statement of income and statement of financial position. 
A) the statement of income. 
B) the statement of changes in equity. 
C) the statement of financial position. 
D) both the statement of income and statement of financial position.

Question 5

Potential employees who use annual reports to learn about the company and evaluate job prospects are regarded as external users.

Accepted Answer

A) True 
 B)False

Question 6

The statement of changes in equity is not dependent on the results from the statement of income.

Accepted Answer

A) True 
 B)False

Question 7

If a company borrows funds and subsequently ceases operations,

Accepted Answer

A) shareholders have immediate claim on the assets of the corporation. 
B) shareholders have no claim on the assets of the corporation. 
C) shareholders have to pay all debt first before claiming the assets of the corporation. 
D) shareholders have only a residual claim on the assets of the corporation. 
A) shareholders have immediate claim on the assets of the corporation. 
B) shareholders have no claim on the assets of the corporation. 
C) shareholders have to pay all debt first before claiming the assets of the corporation. 
D) shareholders have only a residual claim on the assets of the corporation.

Question 8

Expenses are incurred

Accepted Answer

A) only on rare occasions. 
B) to produce assets. 
C) to produce liabilities. 
D) to generate revenues. 
A) only on rare occasions. 
B) to produce assets. 
C) to produce liabilities. 
D) to generate revenues.

Question 9

The statement of changes in equity is dependent on the results from

Accepted Answer

A) the statement of cash flows. 
B) the statement of financial position. 
C) the statement of income. 
D) a company's share capital. 
A) the statement of cash flows. 
B) the statement of financial position. 
C) the statement of income. 
D) a company's share capital.

Question 10

Accounting provides financial comparisons of operating alternatives, projections of income from new sales campaigns, analyses of sales costs, and forecasts of cash needs for external users.

Accepted Answer

A) True 
 B)False

Question 11

The common characteristic possessed by all assets is

Accepted Answer

A) long life. 
B) great monetary value. 
C) tangible nature. 
D) future economic benefit. 
A) long life. 
B) great monetary value. 
C) tangible nature. 
D) future economic benefit.

Question 12

Shareholders' equity is usually comprised of

Accepted Answer

A) common shares and dividends declared. 
B) common shares and retained earnings. 
C) dividends declared and retained earnings. 
D) net income and retained earnings. 
A) common shares and dividends declared. 
B) common shares and retained earnings. 
C) dividends declared and retained earnings. 
D) net income and retained earnings.

Question 13

Which form of business would have its shares listed on a stock exchange?

Accepted Answer

A) proprietorship 
B) partnership 
C) private corporation 
D) public corporation 
A) proprietorship 
B) partnership 
C) private corporation 
D) public corporation

Question 14

Which of the following is true regarding the statement of cash flows?

Accepted Answer

A) Financing activities for corporations include lending money and buying shares. 
B) Investing activities involve collecting the necessary funds to operate the business. 
C) The purchase of equipment is an example of a financing activity. 
D) Revenues are increases in economic resources that result from a business's operating activities. 
A) Financing activities for corporations include lending money and buying shares. 
B) Investing activities involve collecting the necessary funds to operate the business. 
C) The purchase of equipment is an example of a financing activity. 
D) Revenues are increases in economic resources that result from a business's operating activities.

Question 15

A business organized as a corporation

Accepted Answer

A) is not a separate legal entity in most provinces. 
B) requires that shareholders be personally liable for the debts of the business. 
C) is owned by its shareholders. 
D) has income tax disadvantages over a proprietorship or partnership. 
A) is not a separate legal entity in most provinces. 
B) requires that shareholders be personally liable for the debts of the business. 
C) is owned by its shareholders. 
D) has income tax disadvantages over a proprietorship or partnership.

Question 16

Payments to shareholders are called

Accepted Answer

A) expenses. 
B) liabilities. 
C) dividends. 
D) shares. 
A) expenses. 
B) liabilities. 
C) dividends. 
D) shares.

Question 17

An internal user

Accepted Answer

A) is not involved in managing a company. 
B) does not have access to internal accounting information. 
C) is any employee in the company. 
D) includes company officers. 
A) is not involved in managing a company. 
B) does not have access to internal accounting information. 
C) is any employee in the company. 
D) includes company officers.

Question 18

Retained earnings are

Accepted Answer

A) the shareholders' claim on total assets. 
B) equal to cash. 
C) equal to revenues. 
D) the amount of net income kept in the corporation for future use. 
A) the shareholders' claim on total assets. 
B) equal to cash. 
C) equal to revenues. 
D) the amount of net income kept in the corporation for future use.

Question 19

Any deficiency in cash from operating activities must be made up by issuing shares.

Accepted Answer

A) True 
 B)False

Question 20

A negative balance in retained earnings is called a deficit.

Accepted Answer

A) True 
 B)False

Which of the following uses accounting information to determine whether a marketing proposal will be cost effective?

An advantage of the corporate form of business is that

Common shares are reported on

Dividends declared are reported on

Potential employees who use annual reports to learn about the company and evaluate job prospects are regarded as external users.

The statement of changes in equity is not dependent on the results from the statement of income.

If a company borrows funds and subsequently ceases operations,

Expenses are incurred

The statement of changes in equity is dependent on the results from

Accounting provides financial comparisons of operating alternatives, projections of income from new sales campaigns, analyses of sales costs, and forecasts of cash needs for external users.

The common characteristic possessed by all assets is

Shareholders' equity is usually comprised of

Which form of business would have its shares listed on a stock exchange?

Which of the following is true regarding the statement of cash flows?

A business organized as a corporation

Payments to shareholders are called

An internal user

Retained earnings are

Any deficiency in cash from operating activities must be made up by issuing shares.

A negative balance in retained earnings is called a deficit.

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters

Exam 1: The Purpose and Use of Financial Statements

Which of the following uses accounting information to determine whether a marketing proposal will be cost effective?

An advantage of the corporate form of business is that

Common shares are reported on

Dividends declared are reported on

Potential employees who use annual reports to learn about the company and evaluate job prospects are regarded as external users.

The statement of changes in equity is not dependent on the results from the statement of income.

If a company borrows funds and subsequently ceases operations,

Expenses are incurred

The statement of changes in equity is dependent on the results from

Accounting provides financial comparisons of operating alternatives, projections of income from new sales campaigns, analyses of sales costs, and forecasts of cash needs for external users.

The common characteristic possessed by all assets is

Shareholders' equity is usually comprised of

Which form of business would have its shares listed on a stock exchange?

Which of the following is true regarding the statement of cash flows?

A business organized as a corporation

Payments to shareholders are called

An internal user

Retained earnings are

Any deficiency in cash from operating activities must be made up by issuing shares.

A negative balance in retained earnings is called a deficit.

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters