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

B Revenues will decrease the beginning balance of retained earnings for the period?. C Revenues less expenses will either increase or decrease the beginning balance of retained earnings

76 Test Bank for Financial Accounting 5th

Edition by Harrison

Multiple Choice Questions

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

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

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

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

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

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

Payables are classified as:

1 A) increases in earnings

2 B) assets

3 C) decreases in earnings

4 D) liabilities

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

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

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

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

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

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

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

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

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

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

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

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 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

Assets appear on the:

1 A) balance sheet

2 B) income statement

3 C) retained earnings statement

4 D) cash flow statement

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

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

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 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

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

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

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 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

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

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 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 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

Common shares is a component of:

1 A) total assets

2 B) total liabilities

3 C) share capital

4 D) retained earnings

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

76 Free Test Bank for Financial Accounting 5th

Canadian Edition by Harrison Multiple Choice

Questions - Page 2

Cash would appear on the:

1 A) income statement with the revenues

2 B) retained earnings statement with the net income

3 C) balance sheet with the current assets

4 D) balance sheet with the current liabilities

In order for information to be considered a faithful representation

it must be all of the following except:

1 A) complete

2 B) predictive

3 C) without material error

4 D) neutral

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

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

Notes receivable due in 60 days would be classified as a:

1 A) non-current asset on the balance sheet

2 B) current asset on the balance sheet

3 C) current liability on the balance sheet

4 D) non-current liability on the balance sheet

Increases in shareholders' equity arise from:

1 A) investments by the owner

2 B) payment of dividends

3 C) net income earned during the period

4 D) both investments by the owner and net income earned during the period

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

Common shares appear on the:

1 A) balance sheet

2 B) income statement

3 C) cash flow statement

4 D) retained earnings 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

All of the following are considered standard financial statements except the:

1 A) statement of earnings

2 B) statement of assets

3 C) statement of retained earnings

4 D) cash flow statement

When accounting for cash collected from customers, the

transaction would appear on the cash flow statement as a(an):

1 A) operating activity

2 B) financing activity

3 C) investing activity

4 D) activity that would not appear on the cash flow statement

Depreciation is normally associated with which asset on the balance sheet?

1 A) land

2 B) accounts receivable

3 C) inventory

4 D) equipment

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

The statement that presents a summary of the revenues and expenses of an entity is called the:

1 A) balance sheet

2 B) cash flow statement

3 C) statement of retained earnings

4 D) income statement

Decreases in shareholders' equity result from:

1 A) owner investments

2 B) a net loss during the period

3 C) a net income during the period

4 D) owner investments and a net loss during the period

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

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

Cash dividends:

1 A) decrease revenue on the income statement

2 B) increase expenses on the income statement

3 C) decrease retained earnings on the retained earnings statement

4 D) decrease operating activities on the cash flow statement

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

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

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

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

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

or consumed: