Exam 1: The Purpose and Use of Financial Statements

If total liabilities decreased by $134,000 during a period of time and shareholders' equity increased by $103,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

The statement of changes in equity would not show

A business organized as a separate legal entity is a

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

Payments to shareholders are called dividends.

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

The accounting equation may be expressed as

Which of the following statements regarding external users is true?

Use the following information for questions. Plumbers-on-the-Go Ltd. started the year with total assets of $120,000 and total liabilities of $75,000. During the year, the business recorded $82,000 in service revenues, $45,000 in expenses, and paid dividends of $2,500. -The net income reported for the year was

Dividends declared

Common shares are reported on

A corporation has which of the following set of characteristics?

Net income for the period is determined by subtracting total expenses and dividends declared from revenues.

Authorities, such as the Canada Revenue Agency, want to know whether a business complies with the tax laws.

Payments to shareholders are called

Which of the following activities involves raising the necessary funds to support the business?

Which of the following would be create a cash inflow?

Dividends declared are reported on

Cost of goods sold is a(n)

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.