Question 1

As labour unions represent employees they are also regarded as internal users.

Accepted Answer

A) True 
 B)False

Question 2

Common shares represent

Accepted Answer

A) the creditors' claims on the company. 
B) the total net income of the company to date. 
C) the amount paid by investors for ownership in the company. 
D) the owners' claims on the company. 
A) the creditors' claims on the company. 
B) the total net income of the company to date. 
C) the amount paid by investors for ownership in the company. 
D) the owners' claims on the company.

Question 3

The statement of financial position and statement of changes in equity are related because

Accepted Answer

A) the total assets on the statement of financial position is reported on the statement of changes in equity. 
B) the ending amount on the statement of changes in equity is reported on the statement of financial position. 
C) the ending amount on each statement is transferred to the statement of cash flows. 
D) both contain information for the corporation. 
A) the total assets on the statement of financial position is reported on the statement of changes in equity. 
B) the ending amount on the statement of changes in equity is reported on the statement of financial position. 
C) the ending amount on each statement is transferred to the statement of cash flows. 
D) both contain information for the corporation.

Question 4

Which of the following is not a principal type of business activity?

Accepted Answer

A) operating 
B) investing 
C) financing 
D) marketing 
A) operating 
B) investing 
C) financing 
D) marketing

Question 5

Expenses are identified by the type of liability associated with them.

Accepted Answer

A) True 
 B)False

Question 6

Economic resources that are owned by a business are called shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 7

Accounting identifies and records economic events of a business.

Accepted Answer

A) True 
 B)False

Question 8

A proprietor has unlimited liability.

Accepted Answer

A) True 
 B)False

Question 9

The world's economic systems depend on financial reporting that is

Accepted Answer

A) highly transparent. 
B) accurate. 
C) reliable. 
D) all of the above 
A) highly transparent. 
B) accurate. 
C) reliable. 
D) all of the above

Question 10

Resources owned by a corporation are referred to as

Accepted Answer

A) shareholders' equity. 
B) liabilities. 
C) assets. 
D) revenues. 
A) shareholders' equity. 
B) liabilities. 
C) assets. 
D) revenues.

Question 11

Shareholders' equity can be described as claims of

Accepted Answer

A) creditors on total assets. 
B) owners on total assets. 
C) customers on total assets. 
D) debtors on total assets. 
A) creditors on total assets. 
B) owners on total assets. 
C) customers on total assets. 
D) debtors on total assets.

Question 12

A corporation has which of the following set of characteristics?

Accepted Answer

A) shareholder control, income tax disadvantages, increased skills and resources 
B) simple to set up and maintains control with founder 
C) harder to raise funds and gives shareholders control 
D) easier to transfer ownership and raise funds, limited liability 
A) shareholder control, income tax disadvantages, increased skills and resources 
B) simple to set up and maintains control with founder 
C) harder to raise funds and gives shareholders control 
D) easier to transfer ownership and raise funds, limited liability

Question 13

Which of the following statements is not true?

Accepted Answer

A) Public corporations must use International Financial Reporting Standards. 
B) Private corporations can choose to use either International Financial Reporting Standards (IFRS)or Accounting Standards for Private Enterprises (ASP
E) . 
C) Both public and private corporations issue shares. 
D) All private corporations are small. 
A) Public corporations must use International Financial Reporting Standards. 
B) Private corporations can choose to use either International Financial Reporting Standards (IFRS)or Accounting Standards for Private Enterprises (ASP
E) . 
C) Both public and private corporations issue shares. 
D) All private corporations are small.

Question 14

External users want answers to all of the following questions except

Accepted Answer

A) Is the company earning satisfactory income? 
B) Will the company be able to pay its debts as they come due? 
C) How many employees can the company hire this year? 
D) How does the company compare in profitability with competitors? 
A) Is the company earning satisfactory income? 
B) Will the company be able to pay its debts as they come due? 
C) How many employees can the company hire this year? 
D) How does the company compare in profitability with competitors?

Question 15

The statement of cash flows does not provide information related to

Accepted Answer

A) the cash used during the period. 
B) the change in the cash balance during the period. 
C) the change in income during the period. 
D) where cash came from during the period. 
A) the cash used during the period. 
B) the change in the cash balance during the period. 
C) the change in income during the period. 
D) where cash came from during the period.

Question 16

Which financial statement is prepared first?

Accepted Answer

A) Statement of financial position 
B) Statement of income 
C) Statement of changes in equity 
D) Statement of cash flows 
A) Statement of financial position 
B) Statement of income 
C) Statement of changes in equity 
D) Statement of cash flows

Question 17

Net income results when

Accepted Answer

A) Assets > Liabilities. B) Assets Expenses. D) Revenues < Expenses. A) Assets > Liabilities. B) Assets Expenses. D) Revenues < Expenses.

Question 18

Assets are resources owned by a business that provide current services or benefits to the business.

Accepted Answer

A) True 
 B)False

Question 19

A business organized as a separate legal entity is a

Accepted Answer

A) corporation. 
B) proprietorship. 
C) government unit. 
D) partnership. 
A) corporation. 
B) proprietorship. 
C) government unit. 
D) partnership.

Question 20

The reporting entity concept applies to

Accepted Answer

A) sole proprietorships only. 
B) partnerships only. 
C) corporations only. 
D) all three forms of business organizations. 
A) sole proprietorships only. 
B) partnerships only. 
C) corporations only. 
D) all three forms of business organizations.

As labour unions represent employees they are also regarded as internal users.

Common shares represent

The statement of financial position and statement of changes in equity are related because

Which of the following is not a principal type of business activity?

Expenses are identified by the type of liability associated with them.

Economic resources that are owned by a business are called shareholders' equity.

Accounting identifies and records economic events of a business.

A proprietor has unlimited liability.

The world's economic systems depend on financial reporting that is

Resources owned by a corporation are referred to as

Shareholders' equity can be described as claims of

A corporation has which of the following set of characteristics?

Which of the following statements is not true?

External users want answers to all of the following questions except

The statement of cash flows does not provide information related to

Which financial statement is prepared first?

Net income results when

Assets are resources owned by a business that provide current services or benefits to the business.

A business organized as a separate legal entity is a

The reporting entity concept applies to

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

As labour unions represent employees they are also regarded as internal users.

Common shares represent

The statement of financial position and statement of changes in equity are related because

Which of the following is not a principal type of business activity?

Expenses are identified by the type of liability associated with them.

Economic resources that are owned by a business are called shareholders' equity.

Accounting identifies and records economic events of a business.

A proprietor has unlimited liability.

The world's economic systems depend on financial reporting that is

Resources owned by a corporation are referred to as

Shareholders' equity can be described as claims of

A corporation has which of the following set of characteristics?

Which of the following statements is not true?

External users want answers to all of the following questions except

The statement of cash flows does not provide information related to

Which financial statement is prepared first?

Net income results when

Assets are resources owned by a business that provide current services or benefits to the business.

A business organized as a separate legal entity is a

The reporting entity concept applies to

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