76 free test bank for financial accounting 5th đề trắc nghiệm có đáp án

76 Free Test Bank for Financial Accounting 5th Edition by Harrison Multiple Choice Questions - Page 1 How do revenues for a period relate to the beginning and ending balances in retained

76 Free Test Bank for Financial Accounting 5th Edition

by Harrison Multiple Choice Questions - Page 1

How do revenues for a period relate to the beginning and ending balances in retained earnings?

1 A) Revenues will increase the beginning balance of retained earnings for the period

2 B) Revenues will decrease the beginning balance of retained earnings for the period

3 C) Revenues less expenses will either increase or decrease the beginning balance of retained earnings for the period

4 D) Revenues less expenses will either increase or decrease the ending balance of retained earnings for the period

The main source of cash for a business normally arises from:

1 A) current assets

2 B) operating activities

3 C) financing activities

4 D) investing activities

Shareholders' equity for Raisin Corporation on January 1, 2014 and December 31, 2014 were $60,000 and $75,000, respectively

Assets on January 1, 2014 and December 31, 2014 were $115,000 and $105,000, respectively Liabilities on January 1, 2014 were

$55,000 What is the amount of liabilities on December 31, 2014?

1 A) $40,000

2 B) $15,000

3 C) $30,000

4 D) indeterminable from the given information

The balance sheet is sometimes also called the:

1 A) statement of operations

2 B) statement of cash position

3 C) statement of financial position

4 D) statement of income and expense

The accounting concept that maintains that each organization or section of an organization stands apart from other organizations and individuals is known as the:

1 A) reliability principle

2 B) going-concern assumption

3 C) entity assumption

4 D) monetary unit assumption

The assumption assumes that the organization will continue operating normally for the foreseeable future

1 A) cost

2 B) stable monetary unit

3 C) entity

4 D) going-concern

Which of the following best describes a liability?

1 A) Liabilities are a form of share capital

2 B) Liabilities are future economic benefits to which a company is entitled

3 C) Liabilities are accounts receivable of the company

4 D) Liabilities are economic obligations to creditors to be paid at some future date by the company

The relevant measure of value of the assets of a company that is going out of business is its:

1 A) historical cost

2 B) recorded value

3 C) book value

4 D) Liquidation value

Financial statements are:

1 A) reports issued by outside consultants who are hired to analyze key operations of the business

2 B) reports created by management that states it is responsible for the acts of the corporation

3 C) standard documents that tell us how well a business is performing and where it stands in financial terms

4 D) standard documents issued by outside consultants who are hired to analyze key operations of the business in financial terms

Retained earnings appear on which of the following financial

statements?

1 A) statement of retained earnings, cash flow statement, and income

statement, but not the balance sheet

2 B) statement of retained earnings and balance sheet, but not the income statement or cash flow statement

3 C) statement of retained earnings, cash flow statement, and balance sheet, but not the income statement

4 D) statement of retained earnings and cash flow statement, but not the income statement or balance sheet

Which of the following financial statements would a potential

investor most likely use to evaluate a company's financial

performance for the current period?

1 A) balance sheet

2 B) income statement

3 C) cash flow statement

4 D) retained earnings statement

The CEO of a business owns a home and two automobiles The company the CEO works for also owns automobiles and a home in

a remote area used for strategic planning meetings by its

executives Which principle or assumption "draws a sharp

boundary" around the possessions of the CEO and the assets of the business for which he works?

1 A) the entity assumption

2 B) the stable-monetary-unit assumption

3 C) the going-concern assumption

4 D) the objectivity assumption

The principle that states that assets acquired by the business

should be recorded at their actual price is the:

1 A) objectivity assumption

2 B) stable monetary unit assumption

3 C) cost assumption

4 D) reliability assumption

Gains and losses appear on which of the financial statements listed below?

1 A) the balance sheet

2 B) the income statement

3 C) the retained earnings statement

4 D) the cash flow statement

Cost of goods sold is:

1 A) added to sales on the income statement

2 B) deducted from sales on the balance sheet

3 C) deducted from sales on the income statement

4 D) added to sales on the retained earnings statement

Revenues are:

1 A) increases in liabilities resulting from delivering goods or services to

customers

2 B) increases in retained earnings resulting from delivering goods or services

to customers

3 C) decreases in assets resulting from delivering goods or services to

customers

4 D) decreases in retained earnings resulting from delivering goods or services

to customers

Cash spent to purchase a new building would appear on the cash flow statement as:

1 A) a financing activity

2 B) an operating activity

3 C) an investing activity

4 D) purchases of new equipment do not appear on a cash flow statement

The owners' interest in the assets of a corporation is known as:

1 A) assets

2 B) shareholders' equity

3 C) expenses

4 D) revenues

Operating expenses appear on the income statement:

1 A) directly after gross margin

2 B) directly after cost of goods sold

3 C) directly after revenue

4 D) do not appear on the income statement

Payables are classified as:

1 A) increases in earnings

2 B) assets

3 C) decreases in earnings

4 D) liabilities

The date of the income statement:

1 A) covers one day in time

2 B) covers a period of time, usually for an accounting period

3 C) is not dated

4 D) may cover a period of time or only one day in time, like a snapshot photograph

Claims held by the shareholders (owners) of a corporation are referred to as:

1 A) retained earnings

2 B) share capital

3 C) share capital minus retained earnings

4 D) share capital plus retained earnings

Which financial statement is based on the accounting equation?

1 A) statement of retained earnings

2 B) income statement

3 C) cash flow statement

4 D) balance sheet

To determine a company's gross margin for the period, an investor would look on the:

1 A) balance sheet

2 B) cash flow statement

3 C) income statement

4 D) statement of retained earnings

Dividends appear on the:

1 A) retained earnings statement

2 B) income statement

3 C) balance sheet

4 D) both the retained earnings statement and the income statement

Receivables are classified as:

1 A) increases in earnings

2 B) assets

3 C) decreases in earnings

4 D) liabilities

On January 1, 2014, total assets for Liftoff Technologies were

$125,000; on December 31, 2014, total assets were $145,000 On January 1, 2014, total liabilities were $110,000; on December 31,

2014, total liabilities were $115,000 What are the amount of the change and the direction of the change in Liftoff Technologies shareholders' equity for 2014?

1 A) decrease of $15,000

2 B) increase of $15,000

3 C) increase of $30,000

4 D) decrease of $30,000

The cash flow statement is divided into three categories relating to cash flows from operating, investing, and:

1 A) management planning activities

2 B) financing activities

3 C) strategic positioning activities

4 D) marketing activities

If assets increase $120,000 during a given period and liabilities decrease $25,000 during the same period, shareholders' equity must:

1 A) increase $95,000

2 B) decrease $145,000

3 C) decrease $95,000

4 D) increase $145,000

Assets appear on the:

1 A) balance sheet

2 B) income statement

3 C) retained earnings statement

4 D) cash flow statement

The accounting equation can be stated as:

1 A) Assets + Liabilities = Shareholders' equity

2 B) Assets = Liabilities + Shareholders' equity

3 C) Assets = Liabilities - Shareholders' equity

4 D) Assets + Shareholders' equity = Liabilities

Which of the following persons or groups have the ultimate control

of a corporation?

1 A) the chief executive officer

2 B) the board of directors

3 C) the audit committee

4 D) the shareholders

If liabilities increase $120,000 during a given period and

shareholders' equity decreases $25,000 during the same period, assets must:

1 A) decrease $145,000

2 B) increase $145,000

3 C) increase $95,000

4 D) decrease $95,000

Dividends:

1 A) always affect net income

2 B) are distributions to shareholders of assets (usually cash) generated by net income

3 C) are expenses

4 D) must be paid to shareholders when the company earns a profit

The stable-monetary-unit assumption is the basis for ignoring:

1 A) the possibility that the value of inventory might drop below its historical cost

2 B) fluctuations in the value of the Canadian dollar relative to foreign

currencies

3 C) the effect of inflation in the accounting records

4 D) the difference between the appraised value and the actual cost when recording an asset at its historical cost

Expenses are:

1 A) increases in assets resulting from operations

2 B) increases in retained earnings resulting from operations

3 C) increases in liabilities resulting from purchasing assets

4 D) decreases in retained earnings resulting from operations

An investor wishes to assess a company's financial position at the end of the period Which financial statement would the investor probably examine?

1 A) the cash flow statement

2 B) the income statement

3 C) the balance sheet

4 D) the statement of retained earnings

Common shares is a component of:

1 A) total assets

2 B) total liabilities

3 C) share capital

4 D) retained earnings

76 Free Test Bank for Financial Accounting 5th

Canadian Edition by Harrison Multiple Choice Questions

- Page 2

Depreciation is normally associated with which asset on the

balance sheet?

1 A) land

2 B) accounts receivable

3 C) inventory

4 D) equipment

Accounting standards for accountants in Canada are established by:

1 A) the Canadian Institute of Chartered Accountants

2 B) the Society of Management Accountants of Canada

3 C) the Certified General Accountants Association of Canada

4 D) the Canadian Institute of Chartered Accountants, the Society of

Management Accountants of Canada, and the Certified General Accountants Association of Canada

Net income is:

1 A) deducted from beginning retained earnings on the retained earnings statement

2 B) added to beginning retained earnings on the retained earnings statement

3 C) added to assets on the balance sheet

4 D) deducted from net sales on the income statement

Equipment would appear on the:

1 A) income statement with the revenues

2 B) balance sheet with the non-current assets

3 C) balance sheet with the current assets

4 D) income statement with the operating expenses

When a repurchase of shares is done by a company it:

1 A) increases the amount of owners' equity

2 B) decreases the amount of owners' equity

3 C) decreases the amount of total liabilities

4 D) increases the amount of total liabilities

Losses are reported on the:

1 A) income statement

2 B) balance sheet

3 C) cash flow statement

4 D) statement of retained earnings

According to the Canadian Institute of Chartered Accountants (CICA), the primary objective of financial reporting is to provide information:

1 A) to the federal government about tax matters

2 B) useful for making investment and lending decisions

3 C) regarding the cash flows of the business

4 D) about the profitability of the business

Which of the following financial statements provides a "snapshot photo" of one moment in time?

1 A) balance sheet

2 B) income statement

3 C) statement of retained earnings

4 D) cash flow statement

Assets are generally divided into:

1 A) current assets and solvent assets

2 B) current assets and reliable assets

3 C) non-current assets and solvent assets

4 D) current assets and non-current assets

The balance sheet contains information about:

1 A) liabilities, equity, and expenses

2 B) assets, revenues, and liabilities

3 C) assets, liabilities, and equity

4 D) revenues, expenses, and equity

What is one component of shareholders' equity?

1 A) common shares

2 B) notes payable

3 C) property, plant, and equipment

4 D) cash

The payment of the chief financial officer's salary would appear:

1 A) on the cash flow statement with the operating activities

2 B) on the balance sheet with the current liabilities

3 C) on the income statement with the revenues

4 D) on the income statement as part of cost of goods sold

The amount of net income shown on the income statement also appears on the:

1 A) balance sheet

2 B) statement of assets

3 C) statement of financial position

4 D) statement of retained earnings

Suppose The Fruit Group buys a kiwi for $.10 and sells the kiwi for

$.50 The cost of goods sold would be:

1 A) $.10

2 B) $.40

3 C) $.50

4 D) $.05

Income taxes owed to the federal government would be classified

as a:

1 A) current asset on the balance sheet

2 B) current liability on the balance sheet

3 C) non-current asset on the balance sheet

4 D) financing activity on the cash flow statement

Accounts payable would appear on the:

1 A) income statement with the expenses

2 B) retained earnings statement with the dividends

3 C) balance sheet with the current assets

4 D) balance sheet with the current liabilities

Which financial statement must be prepared before the others?

1 A) income statement

2 B) balance sheet

3 C) cash flow statement

4 D) retained earnings statement

What is the proper order for the cash flow statement?

1 A) financing activities, investing activities, and operating activities

2 B) operating activities, investing activities, and financing activities

3 C) operating activities, financing activities, and investing activities

4 D) investing activities, financing activities, and operating activities

The ending balance in retained earnings appears on the:

1 A) balance sheet only

2 B) balance sheet and statement of retained earnings

3 C) statement of retained earnings only

4 D) income statement

The income statement presents a summary of the:

1 A) revenues and expenses of an entity for a specific time period

2 B) assets and liabilities of an entity

3 C) cash inflows and outflows of an entity

4 D) changes that occurred in the shareholders' equity of an entity

The issuance of shares for cash would be classified as a(n):

1 A) investing activity on a cash flow statement

2 B) financing activity on a cash flow statement

3 C) operating activity on a cash flow statement

4 D) current asset on the balance sheet

Current assets are assets expected to be converted to cash, sold,

or consumed:

1 A) within the next 12 months or within the business's normal operating cycle if less than a year

2 B) within the next 12 months or within the business's normal operating cycle if longer than a year

3 C) within the next 6 months

4 D) within the next 24 months

Common shares appear on the:

1 A) balance sheet

2 B) income statement

3 C) cash flow statement

4 D) retained earnings statement

Which of the following statements should be prepared before the balance sheet is prepared?

1 A) statement of retained earnings

2 B) cash flow statement

3 C) statement of financial position

4 D) both the statement of retained earnings and the cash flow statement

The balance sheet contains:

1 A) the amount of net income

2 B) the beginning balance in retained earnings