Question 1

Public corporations must follow IFRS when preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following forms of business organizations protect the personal assets of the owners from creditors of the business?

Accepted Answer

A) proprietorship 
B) partnership 
C) corporation 
D) corporation and partnership 
A) proprietorship 
B) partnership 
C) corporation 
D) corporation and partnership

Question 3

An organization, for accounting purposes, stands apart from other organizations and individuals as a separate accounting entity.

Accepted Answer

A) True 
 B)False

Question 4

An owner investment of office furniture into the business would:

Accepted Answer

A) decrease owner's equity and decrease liabilities. 
B) increase total assets and increase liabilities. 
C) increase owner's equity and increase total assets. 
D) decrease owner's equity and increase liabilities. 
A) decrease owner's equity and decrease liabilities. 
B) increase total assets and increase liabilities. 
C) increase owner's equity and increase total assets. 
D) decrease owner's equity and increase liabilities.

Question 5

Transactions affecting owner's equity include:

Accepted Answer

A) owner withdrawals and owner investments. 
B) purchases of assets for cash. 
C) purchases of assets on account. 
D) only owner investments. 
A) owner withdrawals and owner investments. 
B) purchases of assets for cash. 
C) purchases of assets on account. 
D) only owner investments.

Question 6

If total liabilities decrease by $22,000 and owner's equity increases by $8,000 during the period, then assets must have:

Accepted Answer

A) increased $30,000. 
B) decreased $30,000. 
C) increased $14,000. 
D) decreased $14,000. 
A) increased $30,000. 
B) decreased $30,000. 
C) increased $14,000. 
D) decreased $14,000.

Question 7

The accounting equation can be stated as:

Accepted Answer

A) Assets = Liabilities - Owner's Equity. 
B) Assets - Liabilities = Owner's Equity. 
C) Liabilities = Assets + Owner's Equity. 
D) Owner's Equity = Assets + Liabilities. 
A) Assets = Liabilities - Owner's Equity. 
B) Assets - Liabilities = Owner's Equity. 
C) Liabilities = Assets + Owner's Equity. 
D) Owner's Equity = Assets + Liabilities.

Question 8

The income statement must be prepared before the statement of owner's equity since net income or net loss is added to or subtracted from the beginning balance in the owner's capital account.

Accepted Answer

A) True 
 B)False

Question 9

The members of the Chartered Professional Accountants in Canada are all governed by rules of professional conduct created by the CPA organization. Describe two of the rules of professional conduct presented in the text book.

Accepted Answer

These rules concern the confidentiality

Question 10

Which of the following statements is correct?

Accepted Answer

A) Businesses classified as publicly accountable enterprises must use IFRS and other businesses must use ASPE. 
B) Businesses classified as publicly accountable enterprises may use IFRS or ASPE depending on their size. 
C) Businesses not classified as publicly accountable enterprises may not use IFRS. 
D) Businesses classified as publicly accountable enterprises must use IFRS and other businesses may use IFRS or ASPE. 
A) Businesses classified as publicly accountable enterprises must use IFRS and other businesses must use ASPE. 
B) Businesses classified as publicly accountable enterprises may use IFRS or ASPE depending on their size. 
C) Businesses not classified as publicly accountable enterprises may not use IFRS. 
D) Businesses classified as publicly accountable enterprises must use IFRS and other businesses may use IFRS or ASPE.

Question 11

The income statement shows how much the cash account either increased or decreased during the period.

Accepted Answer

A) True 
 B)False

Question 12

Table 1-3
Ace Builders had the following transactions in June: earned $4,000 "on account" that will be collected in cash next month; collected $3,000 from a customer that was owed from a previous month; incurred $500 of repair expense and paid cash to the repairman; paid $1,200 cash to a supplier that it owed from the previous month; paid out $800 in cash withdrawals to the owner.
-For Ace Builders, what is the combined effect on cash from the June transactions?

Accepted Answer

A) Down $800 
B) Down $2,500 
C) Up $4,500 
D) Up $500 
A) Down $800 
B) Down $2,500 
C) Up $4,500 
D) Up $500

Question 13

Which of the following transactions would increase one asset and decrease another asset?

Accepted Answer

A) purchasing equipment for cash 
B) borrowing money from a bank 
C) performing a service and receiving the cash immediately 
D) purchasing office supplies on account 
A) purchasing equipment for cash 
B) borrowing money from a bank 
C) performing a service and receiving the cash immediately 
D) purchasing office supplies on account

Question 14

Total assets and total liabilities were $31,000 and $26,000 respectively at the beginning of the period. Assets increased by 20% and liabilities increased by 10% during the period. What is the owner's equity at the end of the period?

Accepted Answer

A) $8,600 
B) $65,800 
C) $290 
D) $5,000 
A) $8,600 
B) $65,800 
C) $290 
D) $5,000

Question 15

The amount owed by an entity when it makes a purchase on account is termed a(n):

Accepted Answer

A) accounts receivable. 
B) accounts payable. 
C) note receivable. 
D) note payable. 
A) accounts receivable. 
B) accounts payable. 
C) note receivable. 
D) note payable.

Question 16

A business acquires a parcel of land by issuing a note payable for $50,000. This transaction causes:

Accepted Answer

A) total assets to increase. 
B) owner's equity to increase. 
C) assets to increase and equity to increase. 
D) liabilities to decrease. 
A) total assets to increase. 
B) owner's equity to increase. 
C) assets to increase and equity to increase. 
D) liabilities to decrease.

Question 17

If owner's equity is $200,000 and total assets are $325,000, total liabilities would be:

Accepted Answer

A) $200,000. 
B) $525,000. 
C) $125,000. 
D) $325,000. 
A) $200,000. 
B) $525,000. 
C) $125,000. 
D) $325,000.

Question 18

Purchasing office equipment on account would:

Accepted Answer

A) increase total assets and increase liabilities. 
B) increase total assets and decrease owner's equity. 
C) have no effect on total assets or liabilities. 
D) increase liabilities and decrease owner's equity. 
A) increase total assets and increase liabilities. 
B) increase total assets and decrease owner's equity. 
C) have no effect on total assets or liabilities. 
D) increase liabilities and decrease owner's equity.

Question 19

Determine the expenses for the current period based on the following data: $\begin{array}{llcc}
  \text {Net income for the current period  } &\$15,000  \
 \text {  Ending owner's equity } &45,000\
 \text { Beginning owner's equity } &40,000\
 \text { Owner withdrawals } &10,000\
 \text {  Revenue for the current period } &90,000\
\end{array}$

Accepted Answer

Revenue - net income

Question 20

The financial statement that presents a summary of the assets, liabilities, and owner's equity as of a specific date is the:

Accepted Answer

A) statement of assets. 
B) balance sheet. 
C) statement of owner's equity. 
D) cash flow statement. 
A) statement of assets. 
B) balance sheet. 
C) statement of owner's equity. 
D) cash flow statement.

Public corporations must follow IFRS when preparing financial statements.

Which of the following forms of business organizations protect the personal assets of the owners from creditors of the business?

An organization, for accounting purposes, stands apart from other organizations and individuals as a separate accounting entity.

An owner investment of office furniture into the business would:

Transactions affecting owner's equity include:

If total liabilities decrease by $22,000 and owner's equity increases by $8,000 during the period, then assets must have:

The accounting equation can be stated as:

The income statement must be prepared before the statement of owner's equity since net income or net loss is added to or subtracted from the beginning balance in the owner's capital account.

The members of the Chartered Professional Accountants in Canada are all governed by rules of professional conduct created by the CPA organization. Describe two of the rules of professional conduct presented in the text book.

Which of the following statements is correct?

The income statement shows how much the cash account either increased or decreased during the period.

Which of the following transactions would increase one asset and decrease another asset?

Total assets and total liabilities were $31,000 and $26,000 respectively at the beginning of the period. Assets increased by 20% and liabilities increased by 10% during the period. What is the owner's equity at the end of the period?

The amount owed by an entity when it makes a purchase on account is termed a(n):

A business acquires a parcel of land by issuing a note payable for $50,000. This transaction causes:

If owner's equity is $200,000 and total assets are $325,000, total liabilities would be:

Purchasing office equipment on account would:

Determine the expenses for the current period based on the following data: Net income for the current period \1 5,000 Ending owner's equity 45,000 Beginning owner's equity 40,000 Owner withdrawals 10,000 Revenue for the current period 90,000

The financial statement that presents a summary of the assets, liabilities, and owner's equity as of a specific date is the:

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters

Exam 1: Accounting and the Business Environment

Public corporations must follow IFRS when preparing financial statements.

Which of the following forms of business organizations protect the personal assets of the owners from creditors of the business?

An organization, for accounting purposes, stands apart from other organizations and individuals as a separate accounting entity.

An owner investment of office furniture into the business would:

Transactions affecting owner's equity include:

If total liabilities decrease by $22,000 and owner's equity increases by $8,000 during the period, then assets must have:

The accounting equation can be stated as:

The income statement must be prepared before the statement of owner's equity since net income or net loss is added to or subtracted from the beginning balance in the owner's capital account.

The members of the Chartered Professional Accountants in Canada are all governed by rules of professional conduct created by the CPA organization. Describe two of the rules of professional conduct presented in the text book.

Which of the following statements is correct?

The income statement shows how much the cash account either increased or decreased during the period.

Which of the following transactions would increase one asset and decrease another asset?

Total assets and total liabilities were $31,000 and $26,000 respectively at the beginning of the period. Assets increased by 20% and liabilities increased by 10% during the period. What is the owner's equity at the end of the period?

The amount owed by an entity when it makes a purchase on account is termed a(n):

A business acquires a parcel of land by issuing a note payable for $50,000. This transaction causes:

If owner's equity is $200,000 and total assets are $325,000, total liabilities would be:

Purchasing office equipment on account would:

Determine the expenses for the current period based on the following data: Net income for the current period \1 5,000 Ending owner's equity 45,000 Beginning owner's equity 40,000 Owner withdrawals 10,000 Revenue for the current period 90,000

The financial statement that presents a summary of the assets, liabilities, and owner's equity as of a specific date is the:

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters