Question 1

Which of the following would not be considered an internal user of accounting data for XYZ Inc.?

Accepted Answer

A) the company president 
B) production manager 
C) purchasing clerk 
D) receptionist of the employees' labour union 
A) the company president 
B) production manager 
C) purchasing clerk 
D) receptionist of the employees' labour union

Question 2

If the retained earnings account increases from the beginning of the year to the end of the year, then

Accepted Answer

A) net income is greater than dividends declared. 
B) a loss is less than dividends declared. 
C) additional investments are less than reported losses. 
D) dividends were received. 
A) net income is greater than dividends declared. 
B) a loss is less than dividends declared. 
C) additional investments are less than reported losses. 
D) dividends were received.

Question 3

Which of the following groups uses accounting information primarily to ensure the company is operating within prescribed rules?

Accepted Answer

A) taxing authorities 
B) regulatory agencies 
C) labour unions 
D) management 
A) taxing authorities 
B) regulatory agencies 
C) labour unions 
D) management

Question 4

A statement of financial position shows

Accepted Answer

A) revenues, liabilities, and shareholders' equity. 
B) expenses, dividends declared, and shareholders' equity. 
C) revenues, expenses, and dividends declared. 
D) assets, liabilities, and shareholders' equity. 
A) revenues, liabilities, and shareholders' equity. 
B) expenses, dividends declared, and shareholders' equity. 
C) revenues, expenses, and dividends declared. 
D) assets, liabilities, and shareholders' equity.

Question 5

Two internal users of accounting information are investors and managers.

Accepted Answer

A) True 
 B)False

Question 6

Accounting information is not important to marketing managers.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is the most appropriate definition of accounting?

Accepted Answer

A) the information system that identifies, records, and communicates the economic events of an organization to interested users 
B) a means of collecting information 
C) the interconnected network of subsystems necessary to operate a business 
D) electronic collection, organization, and communication of vast amounts of information 
A) the information system that identifies, records, and communicates the economic events of an organization to interested users 
B) a means of collecting information 
C) the interconnected network of subsystems necessary to operate a business 
D) electronic collection, organization, and communication of vast amounts of information

Question 8

The issue of shares and distribution of dividends are used in determining net income.

Accepted Answer

A) True 
 B)False

Question 9

The cost of assets consumed or services used is also known as a(n)

Accepted Answer

A) revenue. 
B) expense. 
C) liability. 
D) asset. 
A) revenue. 
B) expense. 
C) liability. 
D) asset.

Question 10

Retained earnings at the end of the period is equal to

Accepted Answer

A) retained earnings at the beginning of the period plus net income minus liabilities. 
B) retained earnings at the beginning of the period plus net income minus dividends declared. 
C) net income for the period. 
D) assets plus liabilities. 
A) retained earnings at the beginning of the period plus net income minus liabilities. 
B) retained earnings at the beginning of the period plus net income minus dividends declared. 
C) net income for the period. 
D) assets plus liabilities.

Question 11

Claims of creditors and shareholders on the assets of a business are called liabilities.

Accepted Answer

A) True 
 B)False

Question 12

The partnership form of business organization

Accepted Answer

A) is a separate legal entity. 
B) is a common form of organization for service-type businesses. 
C) enjoys an unlimited life. 
D) has limited liability. 
A) is a separate legal entity. 
B) is a common form of organization for service-type businesses. 
C) enjoys an unlimited life. 
D) has limited liability.

Question 13

Payments to shareholders are called dividends.

Accepted Answer

A) True 
 B)False

Question 14

The right to receive money in the future is called a(n)

Accepted Answer

A) account payable. 
B) account receivable. 
C) liability. 
D) deferred revenue. 
A) account payable. 
B) account receivable. 
C) liability. 
D) deferred revenue.

Question 15

The proprietorship form of business organization

Accepted Answer

A) in most provinces, must have at least two owners. 
B) is often chosen for single owner operated businesses. 
C) is difficult to set up. 
D) is classified as a separate legal entity. 
A) in most provinces, must have at least two owners. 
B) is often chosen for single owner operated businesses. 
C) is difficult to set up. 
D) is classified as a separate legal entity.

Question 16

Which of the following would not be considered an external user of accounting data?

Accepted Answer

A) Canada Revenue Agency 
B) management 
C) creditors 
D) customers 
A) Canada Revenue Agency 
B) management 
C) creditors 
D) customers

Question 17

The statement of cash flows shows how cash was used during the period.

Accepted Answer

A) True 
 B)False

Question 18

A small neighbourhood barber shop that is operated by its owner would likely be organized as a

Accepted Answer

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

Question 19

The liability of corporate shareholders is limited to the amount of their investment.

Accepted Answer

A) True 
 B)False

Question 20

The statement of cash flows and the statement of financial position are interrelated because

Accepted Answer

A) the ending amount of cash on the statement of cash flows must agree with the amount on the statement of income. 
B) the ending amount of cash on the statement of cash flows must agree with the amount in the statement of changes in equity. 
C) the ending amount of cash on the statement of cash flows must agree with the amount in the statement of financial position. 
D) both disclose the corporation's net income. 
A) the ending amount of cash on the statement of cash flows must agree with the amount on the statement of income. 
B) the ending amount of cash on the statement of cash flows must agree with the amount in the statement of changes in equity. 
C) the ending amount of cash on the statement of cash flows must agree with the amount in the statement of financial position. 
D) both disclose the corporation's net income.

Which of the following would not be considered an internal user of accounting data for XYZ Inc.?

If the retained earnings account increases from the beginning of the year to the end of the year, then

Which of the following groups uses accounting information primarily to ensure the company is operating within prescribed rules?

A statement of financial position shows

Two internal users of accounting information are investors and managers.

Accounting information is not important to marketing managers.

Which of the following is the most appropriate definition of accounting?

The issue of shares and distribution of dividends are used in determining net income.

The cost of assets consumed or services used is also known as a(n)

Retained earnings at the end of the period is equal to

Claims of creditors and shareholders on the assets of a business are called liabilities.

The partnership form of business organization

Payments to shareholders are called dividends.

The right to receive money in the future is called a(n)

The proprietorship form of business organization

Which of the following would not be considered an external user of accounting data?

The statement of cash flows shows how cash was used during the period.

A small neighbourhood barber shop that is operated by its owner would likely be organized as a

The liability of corporate shareholders is limited to the amount of their investment.

The statement of cash flows and the statement of financial position are interrelated because

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 would not be considered an internal user of accounting data for XYZ Inc.?

If the retained earnings account increases from the beginning of the year to the end of the year, then

Which of the following groups uses accounting information primarily to ensure the company is operating within prescribed rules?

A statement of financial position shows

Two internal users of accounting information are investors and managers.

Accounting information is not important to marketing managers.

Which of the following is the most appropriate definition of accounting?

The issue of shares and distribution of dividends are used in determining net income.

The cost of assets consumed or services used is also known as a(n)

Retained earnings at the end of the period is equal to

Claims of creditors and shareholders on the assets of a business are called liabilities.

The partnership form of business organization

Payments to shareholders are called dividends.

The right to receive money in the future is called a(n)

The proprietorship form of business organization

Which of the following would not be considered an external user of accounting data?

The statement of cash flows shows how cash was used during the period.

A small neighbourhood barber shop that is operated by its owner would likely be organized as a

The liability of corporate shareholders is limited to the amount of their investment.

The statement of cash flows and the statement of financial position are interrelated because

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