Question 1

IFRS are the financial reporting standards that must be followed by Canadian public companies.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an example of an operating activity?

Accepted Answer

A)  paying dividends 
B)  sale of investment in other companies' shares 
C)  purchase of property, plant, and equipment 
D)  payment of interest expense 
A)  paying dividends 
B)  sale of investment in other companies' shares 
C)  purchase of property, plant, and equipment 
D)  payment of interest expense

Question 3

Which statement is incorrect in regards to the characteristics of a corporation?

Accepted Answer

A)  It is a separate legal entity. 
B)  It can be sued. 
C)  Shareholders liability is limited to their investment. 
D)  It cannot be publicly accountable. 
A)  It is a separate legal entity. 
B)  It can be sued. 
C)  Shareholders liability is limited to their investment. 
D)  It cannot be publicly accountable.

Question 4

In 2020 Muller Ltd. earned gross revenues of $2,500,000 and had net income of $480,000. During 2020 the company had 200,000 common shares outstanding and its average shareholders' equity was $1,000,000. Muller's basic earnings per share for 2020 is

Accepted Answer

A)  $2.50. 
B)  $2.40. 
C)  $12.50. 
D)  $0.48. 
A)  $2.50. 
B)  $2.40. 
C)  $12.50. 
D)  $0.48.

Question 5

The primary purpose of financial accounting information is to aid users in their economic decision making relative to the organization.

Accepted Answer

A) True 
 B)False

Question 6

A gain or increase in the value of shares is known as capital appreciation.

Accepted Answer

A) True 
 B)False

Question 7

The starting point in the operating activities section of the cash flow statement is

Accepted Answer

A)  Sales Revenue. 
B)  Retained Earnings. 
C)  Beginning Cash Balance. 
D)  Net Income. 
A)  Sales Revenue. 
B)  Retained Earnings. 
C)  Beginning Cash Balance. 
D)  Net Income.

Question 8

Income can also include gains that a company generates from sales that are outside their normal course of operations.

Accepted Answer

A) True 
 B)False

Question 9

Decision makers are often referred to as users of the financial statements and include investors and creditors.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements best describes a proprietorship?

Accepted Answer

A)  can be single or multiple owners 
B)  taxed separately 
C)  most expensive to establish 
D)  owner is responsible for debt of the company 
A)  can be single or multiple owners 
B)  taxed separately 
C)  most expensive to establish 
D)  owner is responsible for debt of the company

Question 11

There may be a single shareholder in the case of a public company or many shareholders in the case of a private company.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an internal user of annual report information?

Accepted Answer

A)  creditors 
B)  board of directors 
C)  regulators 
D)  shareholders 
A)  creditors 
B)  board of directors 
C)  regulators 
D)  shareholders

Question 13

Which of the following is a typical financing activity?

Accepted Answer

A)  purchasing property, plant or equipment 
B)  purchasing another company's shares 
C)  paying interest expense 
D)  paying dividends 
A)  purchasing property, plant or equipment 
B)  purchasing another company's shares 
C)  paying interest expense 
D)  paying dividends

Question 14

The form of business ownership that most effectively limits the risk of ownership is

Accepted Answer

A)  sole proprietorship. 
B)  general partnership. 
C)  corporation. 
D)  none of the above, all forms of business ownership are equally risky. 
A)  sole proprietorship. 
B)  general partnership. 
C)  corporation. 
D)  none of the above, all forms of business ownership are equally risky.

Question 15

The following information is not found on the Statement of Income:

Accepted Answer

A)  EPS. 
B)  Depreciation Expense. 
C)  Goodwill. 
D)  Cost of Goods Sold. 
A)  EPS. 
B)  Depreciation Expense. 
C)  Goodwill. 
D)  Cost of Goods Sold.

Question 16

In which section of the annual report does management comment on the company and its operating results?

Accepted Answer

A)  report to the shareholders 
B)  management's discussion and analysis 
C)  corporate profile 
D)  selected financial data 
A)  report to the shareholders 
B)  management's discussion and analysis 
C)  corporate profile 
D)  selected financial data

Question 17

An example of a financing activity is

Accepted Answer

A)  purchase of property. 
B)  issuing shares. 
C)  sales to customers. 
D)  payment of taxes. 
A)  purchase of property. 
B)  issuing shares. 
C)  sales to customers. 
D)  payment of taxes.

Question 18

The change in retained earnings can be calculated as follows:

Accepted Answer

A)  Net Income - Dividends 
B)  Net Income + Dividends 
C)  Net Income - Interest 
D)  Net Income + Interest 
A)  Net Income - Dividends 
B)  Net Income + Dividends 
C)  Net Income - Interest 
D)  Net Income + Interest

Question 19

The statement of financial position measures cash inflows and outflows of a company over a period of time.

Accepted Answer

A) True 
 B)False

Question 20

The fundamental types of business activities that a firm typically engages in include all of the following except

Accepted Answer

A)  operating. 
B)  borrowing. 
C)  investing. 
D)  financing. 
A)  operating. 
B)  borrowing. 
C)  investing. 
D)  financing.

IFRS are the financial reporting standards that must be followed by Canadian public companies.

Which of the following is an example of an operating activity?

Which statement is incorrect in regards to the characteristics of a corporation?

In 2020 Muller Ltd. earned gross revenues of $2,500,000 and had net income of $480,000. During 2020 the company had 200,000 common shares outstanding and its average shareholders' equity was $1,000,000. Muller's basic earnings per share for 2020 is

The primary purpose of financial accounting information is to aid users in their economic decision making relative to the organization.

A gain or increase in the value of shares is known as capital appreciation.

The starting point in the operating activities section of the cash flow statement is

Income can also include gains that a company generates from sales that are outside their normal course of operations.

Decision makers are often referred to as users of the financial statements and include investors and creditors.

Which of the following statements best describes a proprietorship?

There may be a single shareholder in the case of a public company or many shareholders in the case of a private company.

Which of the following is an internal user of annual report information?

Which of the following is a typical financing activity?

The form of business ownership that most effectively limits the risk of ownership is

The following information is not found on the Statement of Income:

In which section of the annual report does management comment on the company and its operating results?

An example of a financing activity is

The change in retained earnings can be calculated as follows:

The statement of financial position measures cash inflows and outflows of a company over a period of time.

The fundamental types of business activities that a firm typically engages in include all of the following except

Analyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

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Exam 1: Overview of Corporate Financial Reporting

IFRS are the financial reporting standards that must be followed by Canadian public companies.

Which of the following is an example of an operating activity?

Which statement is incorrect in regards to the characteristics of a corporation?

In 2020 Muller Ltd. earned gross revenues of $2,500,000 and had net income of $480,000. During 2020 the company had 200,000 common shares outstanding and its average shareholders' equity was $1,000,000. Muller's basic earnings per share for 2020 is

The primary purpose of financial accounting information is to aid users in their economic decision making relative to the organization.

A gain or increase in the value of shares is known as capital appreciation.

The starting point in the operating activities section of the cash flow statement is

Income can also include gains that a company generates from sales that are outside their normal course of operations.

Decision makers are often referred to as users of the financial statements and include investors and creditors.

Which of the following statements best describes a proprietorship?

There may be a single shareholder in the case of a public company or many shareholders in the case of a private company.

Which of the following is an internal user of annual report information?

Which of the following is a typical financing activity?

The form of business ownership that most effectively limits the risk of ownership is

The following information is not found on the Statement of Income:

In which section of the annual report does management comment on the company and its operating results?

An example of a financing activity is

The change in retained earnings can be calculated as follows:

The statement of financial position measures cash inflows and outflows of a company over a period of time.

The fundamental types of business activities that a firm typically engages in include all of the following except

Analyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Shareholders Equity

Financial Statement Analysis

Filters