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Free Test Bank with Answers for Accounting Information Systems 1st Free Test Bank with Answers for Accounting Information Systems 1st Free Test Bank with Answers for Accounting Information Systems 1st Test Bank with Answers for Intermediate Accounting Principles and Analysis 2nd Test Bank with Answers for Intermediate Accounting Principles and Analysis 2nd Test Bank with Answers for Financial Accounting An Introduction. Free Test Bank with Answers for Auditing and Assurance Services Understandin Test Bank with Answers for Financial Accounting An Introduction to Concepts Methods and Uses Test Bank with Answers for Financial Accounting An Introduction to Concepts Methods and Uses Test Bank with Answers for Advanced Accounting 12th Edition Test Bank with Answers for Auditing A Business Risk Approach 8th Edition Free Test Bank for Management Accounting with Answers Ngân hàng câu hỏi trắc nghiệm Hệ thống thông tin kế toán, Ngân hàng câu hỏi kèm đáp án đề trắc nghiệm Tài chính kế toán, đề trắc nghiệm Quản trị kế toán, kế toán nâng cao, Đề trắc nghiệm có đáp án Tài chính kế toán, Kế toán kiểm toán, kế toán quản trji Test Bank for Managerial Accounting with Answers Đề trắc nghiệm kế toán, trắc nghiệm tài chính, Test bank for Accounting, Test bank with Answer, Test Bank Financial Accounting, Test bank Financial Accounting
Test Bank for Accounting Principles 1st True False Questions - Free Text Questions - Multiple Choice Questions-Page How are most businesses in Canada set up? a as sole proprietorships b as partnerships c as corporations d as separate entities Which of the following items is NOT a business entity? a entrepreneurship b proprietorship c partnership d corporation What managerial accountants provide? a tax reports to government agencies b profit reports to owners and management c reports to management regarding expansion of a product line d consumer reports to customers Suppose that total liabilities decreased by $55,000 during a period of time and owner’s equity increased by $60,000 during the same period What would be the amount and direction (increase or decrease) of the period’s change in total asset? a a $115,000 increase b a $115,000 decrease c a $5,000 increase d a $5,000 decrease Which of the following is INCORRECT about the accounting equation and its elements? a The accounting equation is Assets = Liabilities – Owners’ Equity b Assets are the resources a business possesses c Liabilities represent debts of a business d Examples of assets are cash, land, buildings, and equipment Equipment with an estimated market value of $55,000 is offered for sale at $75,000 The equipment is acquired for $20,000 in cash and a note payable of $40,000 due in 30 days What is the amount used in the buyer’s accounting records to record this acquisition? a $20,000 b $55,000 c $60,000 d $75,000 Which of the following are all examples of merchandising businesses? a Air Canada, Holiday Inn, Gap b Gap, Chapters, Bombardier c Future Shop, Sony, Dell d Future Shop, Best Buy, Gap Which of the following is NOT a business transaction? a Make a sales offer b Sell goods for cash c Receive cash for services to be rendered later d Pay for supplies What does the business entity concept mean? a The owner is part of the business entity b An entity is organized according to provincial or federal charters c An entity is organized according to the rules set by the AcSB d The entity is an individual economic unit for which data are recorded, analyzed, and reported Which entity is organized according to provincial or federal charters and has it ownership divided into shares? a a proprietorship b a corporation c a partnership d a governmental unit Which of the following BEST describes accounting? a It records economic data but does not communicate the data to users according to any specific rules b It is an information system that provides reports to users c It is of no use by individuals outside the business d It is used only for filling out tax returns and for financial statements for various types of governmental reporting requirements What does GAAP stand for? a General Accounting Procedures b Generally Accepted Plans c Generally Accepted Accounting Principles d Generally Accepted Accounting Practices What does earning revenue do? a It increases assets and increases owner’s equity b It increases assets and decreases owner’s equity c It increases one asset and decreases another asset d It decreases assets and increases liabilities Which of the following is BEST describes a manufacturing business? a It changes inputs to products that are sold to customers b It sells products it purchases from other businesses c Only a large business can be considered a manufacturing business d It provide services rather than products to customers Which of the following groups are considered to be internal users of accounting information? a employees and customers b customers and vendors c employees and managers d government and banks Which of the following is a characteristic of a corporation? a Corporations are organized as a separate legal taxable entity b The owner is personally liable for company debts c The life of the entity is limited to the life of the partners d A corporation’s resources are limited to its individual owners’ resources Which two common areas of accounting respectively provide information to internal and external users? a forensic accounting and financial accounting b managerial accounting and financial accounting c managerial accounting and environmental accounting d financial accounting and tax accounting systems Which of the following BEST describes assets? a They are always greater than liabilities b They are either cash or accounts receivables c They are the same as expenses because they are acquired with cash d They are financed by the owner and/or creditors The assets and liabilities of the company are $175,000 and $40,000, respectively Owner’s equity should equal which of the following? a $215,000 b $175,000 c $135,000 d $40,000 Profit is the difference between which of the following? a assets and liabilities b the incoming cash and outgoing cash c the assets purchased with cash contributed by the owner and the cash spent to operate the business d the assets received for goods and services and the amounts used to provide the goods and services Which of the following is NOT true of accounting principles? a Financial accountants follow generally accepted accounting principles (GAAP) b Following GAAP allows accounting information users to compare one company to another c A new accounting principle can be adopted with shareholders’ approval d Accounting principles develop from research, accepted accounting practices, and pronouncements of authoritative bodies Which of the following authoritative body has the primary responsibility for developing accounting principles? a AcSB b CRA c OSC d CMA Which of the following is NOT a role of accounting in business? a providing reports to users about the economic activities and conditions of a business b personally guaranteeing loans of the business c providing information to other users to determine the economic performance and condition of the business d assessing the various informational needs of users and designing the organization’s accounting system to meet those needs Donner Company is selling a piece of land adjacent to its business An appraisal reported the market value of the land to be $120,000 The Focus Company initially offered to buy the land for $107,000 The companies settled on a purchase price of $115,000 On the same day, another piece of land on the same block sold for $122,000 Under the cost principle, what is the amount that will be used to record this transaction in the accounting records? a $107,000 b $115,000 c $120,000 d $122,000 What are the owned resources of a business? a assets b liabilities c equities d revenues Which of the following are certifications for accountants? a CA, CMA, and CGA b CMA, CGA, and AcSB c CGA, CPAB, and CA d GAAP, CA, and CGA How can the accounting equation be expressed? a Assets = Equities – Liabilities b Assets + Liabilities = Owner’s Equity c Assets = Revenues less Liabilities d Assets – Liabilities = Owner’s Equity What is the monetary value charged to customers for the performance of services sold called? a an asset b net income c capital d revenue A business paid $7,000 to a creditor in payment of an amount owed What was the effect of the transaction on the accounting equation? a It increased an asset and decreased another asset b It decreased an asset and decreased a liability c It increased an asset and increased a liability d It increased an asset and increased owner’s equity What are the debts owed by a business? a accounts receivables b equities c owner’s equity d liabilities What are the fundamental qualitative characteristics that define information in financial statements? a verifiability and timeliness characteristics b business entity and the monetary unit concepts c cost principle and understandability characteristic d relevance and reliability characteristics What does the cost principle involve? a the reliability characteristic and the monetary unit principle b relevance and verifiability characteristics c timeliness and understandability characteristics d relevance and reliability characteristics Select the type of business that is most likely to obtain large amounts of resources by issuing shares a partnership b corporation c proprietorship d entrepreneurship Three accounting professions exist in Canada: Chartered Accountant (CA), Certified General Accountant (CGA), and Certified Management Accountant (CMA) True False The role of accounting is to provide many different users with financial information to make economic decisions True False The Canadian Public Accountability Board was created to promote public confidence in the integrity of financial reporting True False Only large companies such as Bombardier, JCP, General Motors, and the Bank of Montreal can be organized as corporations True False Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to management True False About 70% of the businesses in Canada are organized as corporations True False Senior executives cannot be criminally prosecuted for the wrong-doings they commit on behalf of the companies where they work True False Without the cost principle, accounting reports would become unstable and unreliable True False The Accounting Standards Board (AcSB) is the authoritative body that has primary responsibility for developing accounting principles True False A business is an organization that provides goods or services to its customers in exchange for money or other items of value True False Accounting is thought to be the “language of business” because business information is communicated to users True False The basic difference between manufacturing and merchandising companies is the completion level of the products they purchase for resale to customers True False 70 Free Test Bank for Accounting Principles 1st Canadian Edition by Warren True-False Questions-Page An income statement is a summary of the revenues and expenses of a business as of a specific date True False Receiving payments on an account receivable increases both equity and assets True False If the assets owned by a business total $75,000 and liabilities total $50,000, the total for owner’s equity is $125,000 True False An account receivable is a claim against a customer arising from a sale on account True False If total assets decreased by $30,000 during a specific period and owner’s equity decreased by $35,000 during the same period, the period’s change in total liabilities was an $65,000 increase True False Revenues are decreases in economic resources either through a decrease in assets or an increase in liabilities caused by the normal activities of the business True False The excess of revenue over the expenses incurred in earning the revenue is called capital True False GAAP stands for General Accepted Accounting Protocols True False Net income and net profit mean the same thing True False The balance sheet represents the accounting equation True False A balance sheet is a list of the assets, liabilities, and owner’s equity of a business for a period of time True False The excess of expenses over revenues is called net income True False If the liabilities owed by a business total $300,000 and owner’s equity is equal to $300,000, then the assets also total $300,000 True False If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period’s change in total owner’s equity was a $200,000 increase True False Both IFRS and Canadian GAAP seek to produce financial statements that help users make decisions True False Cash withdrawals by owners decrease assets and increase equity True False Relevance and reliability are fundamental qualitative characteristics that define the information in financial statements True False Receiving a bill or otherwise being notified that an amount is owed is recorded when the amount is paid True False Expenses increase owner’s equity True False The accounting equation can be expressed as Assets – Liabilities = Owner’s Equity True False Purchasing supplies on account increases liabilities and decreases equity True False The owner’s rights to the assets rank ahead of the creditors’ rights to the assets True False If net income for a business was $180,000, withdrawals were $20,000 in cash, and the owner made no investment, the owner’s equity increased $200,000 True False The financial statements of a proprietorship should include the owner’s personal assets and liabilities True False Reliable information helps investors and others make financial decisions True False A statement of owner’s equity reports the changes in the owner’s equity for a period of time True False If the assets owned by a business total $250,000, and owner’s equity totals $200,000, liabilities total $50,000 True False Cash investments by owners increase both equity and assets True False If net income for a proprietorship was $50,000, the owner withdrew $20,000 in cash, and the owner invested $10,000 in cash, the capital of the owner increased by $40,000 True False Expenses are expired costs of doing business True False Paying an account payable increases liabilities and decreases assets True False The cash flow statement consists of an operating section, an income section, and an equity section True False The owner is only allowed to withdraw cash from the business True False The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of owners True False The principal financial statements of a proprietorship are the income statement, statement of owner’s equity, and the balance sheet True False Revenue is earned only when money is received True False Generally accepted accounting principles regulate how and what financial information is reported by businesses True False Publicly accountable enterprises will be subject to International Financial Reporting Standards (IFRS) True False Free Text Questions Identify each of the following as an (1) increase in owner’s equity, or a (2) decrease in owner’s equity a Fees Earned ;b Wages Expense; c Withdrawal ;d Lawn Care Revenue; e Investment; f Supplies Expense Answer Given a ;b ;c ;d ;e ;f What are the three sections of the cash flow statement? Answer Given Operating Activities, Investing Activities, and the Financing Activities From the following list of accounts taken from Lamar’s accounting records, identify those that would appear on the Income Statement a Rent Expense; b Land ;c Capital ;d Fees Earned ;e Withdrawal; f Wages Expense ;g Investment Answer Given a, d, f Why are ethics important to statement users? Answer Given The information must be trustworthy and useful for decision making If business managers and employees behave in an unethical manner, no one will be willing to invest in or loan money to the business On May 7, Carpet Barn Company offered to pay $95,000 for land with a selling price of $110,000 On May 15, Carpet Barn accepted a counteroffer of $103,000 On June 5, the land was assessed at a value of $120,000 for property tax purposes On December 10, Carpet Barn Company was offered $145,000 for the land by another company At what value should the land be recorded in Carpet Barn Company’s records? Answer Given $103,000 Krammer Company has liabilities equal to one-fourth of the total assets Krammer’s owner’s equity is equal to $30,000 Using the accounting equation, what is the amount of liabilities for Krammer? Answer Given Assets = Liabilities + Owner’s Equity ; 4x = x + $30,000 ; 3x = $30,000 ; x = $10,000 in liabilities Companies such as Enron, WorldCom, and Nortel have been caught in the midst of ethical lapses that led to fines, firings, and criminal and/or civil prosecution List and briefly describe three factors that are responsible for what went wrong in these companies Answer Given The three factors are (1) individual character, (2) firm culture, and (3) laws and enforcement Individual characteristics of honesty, integrity, and fairness in the face of pressure to hide the truth are important in an ethical businessperson By their behaviour and attitude, senior managers of a company set the firm culture In firms such Enron, the senior managers created a culture of greed and indifference to the truth that flowed down to lower-level managers, who took shortcuts and lied to cover their financial frauds The lack of laws and enforcement has been blamed as a contributing factor to financial reporting abuses What information does the income statement give to business users? Answer Given The income statement reports the revenues and expenses for a period of time The result is either a net income or a net loss Indicate whether each of the following represents an asset, a liability, or owner’s equity: a accounts payable ;b wages expense; c capital ;d accounts receivable ;e withdrawal; f land Answer Given a.liability ;b owner’s equity; c owner’s equity; d asset ;e owner’s equity ;f asset What is the major disadvantage of disregarding the cost principle and constantly revaluing assets based on appraisals and opinions? Answer Given Accounting reports become unstable and unreliable Bob Johnson is the sole owner of Johnson’s Carpet Cleaning Service Bob purchased a personal automobile for $10,000 cash and he took out a loan for $20,000 in his name Describe how this transaction is related to the business entity concept Answer Given Under the business entity concept, economic data is limited to the direct activities of the business The business is viewed as separate from its owner Therefore, when Bob buys a personal automobile, it is not listed on the books of Johnson’s Carpet Cleaning, unless Bob invests it in the business In this case, the loan is a personal debt and not a liability of the company and the cash is from Bob’s personal account and not the company’s account Doug Miller is the owner and operator of Miller’s Arcade At the end of its accounting period, December 31, 2011, Miller’s Arcade has assets of $450,000 and liabilities of $125,000 Using the accounting equation, determine the following amounts: a Owner’s Equity as of December 31, 2011 b Owner’s Equity as of December 31, 2012, assuming that assets increased by $65,000 and liabilities increased by $35,000 during 2012 Answer Given a $450,000 = $125,000 + $325,000 ; b ($450,000 + $65,000) = ($125,000 + $35,000) + $355,000 Identify which of the following accounts appear on a balance sheet: a Cash; b Fees Earned; c Joe Brown, Capital;d Wages Payable ;e Rent Expense; f Prepaid Advertising ;g Land Answer Given a., c., d., f., g Explain internal and external users of accounting information by presenting the area of accounting that provides each with information In your answers, also give an example of each type of user along with a report that each might use Answer Given Internal users of accounting information include managers and employees The area of accounting that provides internal users with information is called managerial accounting or management accounting An example of a report that might be used internally by managers or employees is one that includes information about customers, prices, and plans to expand the business; External users of accounting information include customers, creditors, banks, and the government These users are not directly involved in managing or operating the business Financial reports about the profitability of a company’s operations are important to banks and creditors when deciding to lend money to the company or extend credit ... provide information to internal and external users? a forensic accounting and financial accounting b managerial accounting and financial accounting c managerial accounting and environmental accounting. .. the company c Accounting provides creditors and banks with information regarding the credit risk rating of the company d Accounting is not responsible for providing any form of information to... owner’s equity 89 Free Test Bank for Accounting Principles 1st Canadian Edition by Warren Multiple Choice QuestionsPage When are expenses recorded? a when cash is paid for services received b