Question 1

An creditor might look at a company's financial statements to determine if the company's:

Accepted Answer

A)  earnings are rising or falling.
B)  stock is likely to fall,signalling a good time to sell.
C)  stock is likely to rise,signalling a good time to buy.
D)  company has enough assets to cover its liabilities.E) All of the above
F) B) and C)

Question 2

Which of the following are the two fundamental characteristics financial information must possess to be judged useful to decision makers?

Accepted Answer

A)  Relevance and faithful representation
B)  Truthful and clarity
C)  Complete and relevant
D)  Elaborate and faithful representationE) C) and D)
F) A) and C)

Question 3

The purpose of a statement of retained earnings is to:

Accepted Answer

A)  estimate the current value of a company's assets.
B)  report how the profits of a company have been distributed to shareholders or retained in the business.
C)  show where the money is flowing into and out of a company.
D)  explain the specific revenues and expenses arising during the period.E) A) and D)
F) A) and C)

Question 4

Which of the following enhance the usefulness of financial information with reference to financial statements?

Accepted Answer

A)  Comparability to prior periods and other companies,verifiability,timeliness,and understandability.
B)  Integrity,relevance,faithfulness and comparability to prior periods and other companies
C)  Clarity,integrity,relevance and faithfulness
D)  Verifiability,relevance and faithfulnessE) B) and D)
F) A) and B)

Question 5

Which of the following are the principles of accounting?

Accepted Answer

A)  Unit of measure,cost-benefit,materiality,industry practices
B)  Unit of measure,separate entity,going concern,time period
C)  Cost,revenue recognition,matching,full disclosure
D)  Cost-benefit,materiality,industry practicesE) A) and B)
F) B) and C)

Question 6

The $207,100 shown on the balance sheet has been distributed to shareholders as dividends.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would represent an operating activity?

Accepted Answer

A)  Purchasing equipment with money borrowed from creditors.
B)  An investment of financial capital by the owners.
C)  Buying the company's office supplies.
D)  Repaying a loan the company had taken out.E) A) and B)
F) C) and D)

Question 8

You paid $10,000 to buy 1% of the stock in a corporation that has now gone bankrupt.The company owes $10 million dollars to creditors.As a result of the bankruptcy,you will lose $100,000.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is incorrect about the notes to the financial statements:

Accepted Answer

A)  explain what accounting policies were used to prepare the financial statements.
B)  provide additional information about what is included in the financial statements.
C)  provide additional information about financial matters that are not included in the financial statements.
D)  certify to the fact that the statements have been audited.E) A) and C)
F) B) and D)

Question 10

The three main types of business activities measured by financial statements are:

Accepted Answer

A)  selling goods,selling services,and obtaining financing.
B)  operating activities,investing activities,and financing activities.
C)  hiring,producing,and advertising.
D)  generating revenues,paying expenses,and incurring dividends.E) C) and D)
F) None of the above

Question 11

In which of the following business organization the owners could only lose the money they invested in the business?

Accepted Answer

A)  A Crown corporation.
B)  A sole proprietorship.
C)  A corporation.
D)  A partnership.E) A) and B)
F) None of the above

Question 12

Which of the following is a publicly accountable profit-oriented enterprise?

Accepted Answer

A)  A publicly traded corporation
B)  A crown corporation
C)  A sole proprietorship
D)  A partnershipE) B) and D)
F) None of the above

Question 13

The payment of dividends is a financing activity.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 14

Generally Accepted Accounting Principles (GAAP) in Canada were established by:

Accepted Answer

A)  an Italian monk in 1494.
B)  the Canadian Parliament.
C)  the CICA.
D)  IFRS.E) None of the above
F) A) and B)

Question 15

To determine whether Generally Accepted Accounting Principles were followed in the preparation of financial statements,an examination of:

Accepted Answer

A)  tax documents would be examined by the Revenue Canada Agency.
B)  the annual report would be examined by the Toronto Stock Exchange.
C)  the financial statements and related documents would be examined by an independent auditor.
D)  the financial statements and related documents would be examined by the CICA.E) A) and B)
F) B) and C)

Question 16

Prepare a balance sheet using the above data

Accepted Answer

The answer of Prepare a balance sheet using the above...

Question 17

Public corporations:

Accepted Answer

A)  are businesses owned by two or more people,each of whom is personally liable for the debts of the business.
B)  are businesses whose stock is bought and sold on a stock exchange.
C)  are businesses whose stock is bought and sold privately.
D)  are setup for non-profit purposes.E) B) and D)
F) A) and B)

Question 18

Which of the following is not required to use IFRS?

Accepted Answer

A)  Private enterprise
B)  Publically traded company
C)  Crown corporation
D)  All businesses are required to use IFRSE) A) and D)
F) None of the above

Question 19

.Using the data in the chart,prepare a statement of cash flows.
 $$\begin{array} { l r } 
\text { Cash paid for other operating activities } & \$ 1,291,000 \
\text { Cash paid for dividends } & 16,900 \
\text { Cash received from selling equipment and other assets } & 16,300 \
\text { Cash paid on notes payable } & 412,000 \
\text { Cash paid to suppliers and employees } & 1,258,900 \
\text { Cash collected from customers } & 3,840,700 \
\text { Cash paid to purchase equipment and other assets } & 140,200
\end{array}$$

Accepted Answer

The answer of .Using the data in the chart,prepare a...

Question 20

A company is involved in investing activities when these:

Accepted Answer

A)  activities are directly related to running the core business to earn profits.
B)  activities involve buying and selling productive resources with long lives (such as buildings,land,equipment,and tools) ,purchasing investments,and lending to others.
C)  activities involve borrowing from banks,repaying bank loans,receiving contributions from shareholders,or paying dividends to shareholders
D)  All of the aboveE) All of the above
F) C) and D)

Exam 1: Business Decisions and Financial Accounting

Which of the following enhance the usefulness of financial information with reference to financial statements?

Correct Answer
verified

The three main types of business activities measured by financial statements are:

Correct Answer
verified

To determine whether Generally Accepted Accounting Principles were followed in the preparation of financial statements,an examination of:

Correct Answer
verified

In which of the following business organization the owners could only lose the money they invested in the business?

Correct Answer
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The purpose of a statement of retained earnings is to:

Correct Answer
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Which of the following is incorrect about the notes to the financial statements:

Correct Answer
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Which of the following is not required to use IFRS?

Correct Answer
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Which of the following would represent an operating activity?

Correct Answer
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Public corporations:

Correct Answer
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A company is involved in investing activities when these:

Correct Answer
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Correct Answer
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An creditor might look at a company's financial statements to determine if the company's:

Correct Answer
verified

Which of the following are the principles of accounting?

Correct Answer
verified

The payment of dividends is a financing activity. BT: Comprehension

Correct Answer
verified

The $207,100 shown on the balance sheet has been distributed to shareholders as dividends. BT: Comprehension

Correct Answer
verified

You paid $10,000 to buy 1% of the stock in a corporation that has now gone bankrupt.The company owes $10 million dollars to creditors.As a result of the bankruptcy,you will lose $100,000. BT: Comprehension

Correct Answer
verified

Which of the following are the two fundamental characteristics financial information must possess to be judged useful to decision makers?

Correct Answer
verified

Prepare a balance sheet using the above data

Correct Answer
verified

Which of the following is a publicly accountable profit-oriented enterprise?

Correct Answer
verified

Generally Accepted Accounting Principles (GAAP) in Canada were established by:

Correct Answer
verified

Exam 1: Business Decisions and Financial Accounting

Which of the following enhance the usefulness of financial information with reference to financial statements?

Correct AnswerverifiedShow Answer

The three main types of business activities measured by financial statements are:

Correct AnswerverifiedShow Answer

To determine whether Generally Accepted Accounting Principles were followed in the preparation of financial statements,an examination of:

Correct AnswerverifiedShow Answer

In which of the following business organization the owners could only lose the money they invested in the business?

Correct AnswerverifiedShow Answer

The purpose of a statement of retained earnings is to:

Correct AnswerverifiedShow Answer

Which of the following is incorrect about the notes to the financial statements:

Correct AnswerverifiedShow Answer

Which of the following is not required to use IFRS?

Correct AnswerverifiedShow Answer

Which of the following would represent an operating activity?

Correct AnswerverifiedShow Answer

Public corporations:

Correct AnswerverifiedShow Answer

A company is involved in investing activities when these:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An creditor might look at a company's financial statements to determine if the company's:

Correct AnswerverifiedShow Answer

Which of the following are the principles of accounting?

Correct AnswerverifiedShow Answer

The payment of dividends is a financing activity. BT: Comprehension

Correct AnswerverifiedShow Answer

The $207,100 shown on the balance sheet has been distributed to shareholders as dividends. BT: Comprehension

Correct AnswerverifiedShow Answer

You paid $10,000 to buy 1% of the stock in a corporation that has now gone bankrupt.The company owes $10 million dollars to creditors.As a result of the bankruptcy,you will lose $100,000. BT: Comprehension

Correct AnswerverifiedShow Answer

Which of the following are the two fundamental characteristics financial information must possess to be judged useful to decision makers?

Correct AnswerverifiedShow Answer

Prepare a balance sheet using the above data

Correct AnswerverifiedShow Answer

Which of the following is a publicly accountable profit-oriented enterprise?

Correct AnswerverifiedShow Answer

Generally Accepted Accounting Principles (GAAP) in Canada were established by:

Correct AnswerverifiedShow Answer

Correct Answer
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