Question 1

Which of the following financial statements is concerned with the company at a point in time?

Accepted Answer

A) Statement of financial position 
B) Statement of income 
C) Statement of changes in equity 
D) Statement of cash flows 
A) Statement of financial position 
B) Statement of income 
C) Statement of changes in equity 
D) Statement of cash flows

Question 2

The accounting equation may be expressed as

Accepted Answer

A) Assets = Shareholders' Equity - Liabilities. 
B) Assets = Liabilities + Shareholders' Equity. 
C) Assets + Liabilities = Shareholders' Equity. 
D) Assets + Shareholders' Equity = Liabilities. 
A) Assets = Shareholders' Equity - Liabilities. 
B) Assets = Liabilities + Shareholders' Equity. 
C) Assets + Liabilities = Shareholders' Equity. 
D) Assets + Shareholders' Equity = Liabilities.

Question 3

The financial statement that summarizes the changes in common shares and retained earnings for a specific period of time is the

Accepted Answer

A) statement of financial position. 
B) statement of income. 
C) statement of cash flows. 
D) statement of changes in equity. 
A) statement of financial position. 
B) statement of income. 
C) statement of cash flows. 
D) statement of changes in equity.

Question 4

The statement of financial position

Accepted Answer

A) summarizes the changes in shareholders' equity for a specific period of time. 
B) reports the changes in assets, liabilities, and shareholders' equity over a period of time. 
C) reports the assets, liabilities, and shareholders' equity at a specific date. 
D) presents the revenues and expenses for a specific period of time. 
A) summarizes the changes in shareholders' equity for a specific period of time. 
B) reports the changes in assets, liabilities, and shareholders' equity over a period of time. 
C) reports the assets, liabilities, and shareholders' equity at a specific date. 
D) presents the revenues and expenses for a specific period of time.

Question 5

Debt and obligations of a business are referred to as

Accepted Answer

A) assets. 
B) equities. 
C) liabilities. 
D) expenses. 
A) assets. 
B) equities. 
C) liabilities. 
D) expenses.

Question 6

Anyone who works for a company but does not necessarily have access to accounting information to assist them in managing and operating the company is still considered to be an internal user.

Accepted Answer

A) True 
 B)False

Question 7

Depreciation is the cost of certain long-lived assets allocated to expense for each period.

Accepted Answer

A) True 
 B)False

Question 8

Financial statement users are interested in net income because it may be a predictor of future net income.

Accepted Answer

A) True 
 B)False

Question 9

Dividends declared

Accepted Answer

A) increase assets. 
B) increase expenses. 
C) decrease revenues. 
D) decrease retained earnings. 
A) increase assets. 
B) increase expenses. 
C) decrease revenues. 
D) decrease retained earnings.

Question 10

The primary purpose of the statement of cash flows is to report

Accepted Answer

A) a company's investing transactions. 
B) a company's financing transactions. 
C) information about cash receipts and cash payments of a company. 
D) the net increase or decrease in cash. 
A) a company's investing transactions. 
B) a company's financing transactions. 
C) information about cash receipts and cash payments of a company. 
D) the net increase or decrease in cash.

Question 11

Net income for the period is determined by subtracting total expenses and dividends declared from revenues.

Accepted Answer

A) True 
 B)False

Question 12

Authorities, such as the Canada Revenue Agency, want to know whether a business complies with the tax laws.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following uses accounting information to determine whether a company can pay its obligations?

Accepted Answer

A) shareholders 
B) marketing managers 
C) creditors 
D) Canada Revenue Agency 
A) shareholders 
B) marketing managers 
C) creditors 
D) Canada Revenue Agency

Question 14

Which of the following activities involves raising the necessary funds to support the business?

Accepted Answer

A) operating 
B) investing 
C) financing 
D) marketing 
A) operating 
B) investing 
C) financing 
D) marketing

Question 15

The reasons for a decrease in cash can be determined by examining the statement of income.

Accepted Answer

A) True 
 B)False

Question 16

The users of private company financial statements do not have access to financial information beyond that available to the users of public company financial statements.

Accepted Answer

A) True 
 B)False

Question 17

The statement of financial position is always the first statement prepared and presented.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements regarding external users is true?

Accepted Answer

A) Shareholders and creditors are the only people who need accounting information. 
B) Canada Revenue Agency is the primary external user of financial information. 
C) External users of accounting information include the managers who plan, organize, and run a business. 
D) The information needs and questions of external users vary considerably. 
A) Shareholders and creditors are the only people who need accounting information. 
B) Canada Revenue Agency is the primary external user of financial information. 
C) External users of accounting information include the managers who plan, organize, and run a business. 
D) The information needs and questions of external users vary considerably.

Question 19

Accounting communicates financial information about a business to both internal and external users.

Accepted Answer

A) True 
 B)False

Question 20

Which financial statement would indicate whether the company relies more on debt or on shareholders' equity to finance its assets?

Accepted Answer

A) Statement of cash flows 
B) Statement of changes in equity 
C) Statement of income 
D) Statement of financial position 
A) Statement of cash flows 
B) Statement of changes in equity 
C) Statement of income 
D) Statement of financial position

Which of the following financial statements is concerned with the company at a point in time?

The accounting equation may be expressed as

The financial statement that summarizes the changes in common shares and retained earnings for a specific period of time is the

The statement of financial position

Debt and obligations of a business are referred to as

Anyone who works for a company but does not necessarily have access to accounting information to assist them in managing and operating the company is still considered to be an internal user.

Depreciation is the cost of certain long-lived assets allocated to expense for each period.

Financial statement users are interested in net income because it may be a predictor of future net income.

Dividends declared

The primary purpose of the statement of cash flows is to report

Net income for the period is determined by subtracting total expenses and dividends declared from revenues.

Authorities, such as the Canada Revenue Agency, want to know whether a business complies with the tax laws.

Which of the following uses accounting information to determine whether a company can pay its obligations?

Which of the following activities involves raising the necessary funds to support the business?

The reasons for a decrease in cash can be determined by examining the statement of income.

The users of private company financial statements do not have access to financial information beyond that available to the users of public company financial statements.

The statement of financial position is always the first statement prepared and presented.

Which of the following statements regarding external users is true?

Accounting communicates financial information about a business to both internal and external users.

Which financial statement would indicate whether the company relies more on debt or on shareholders' equity to finance its assets?

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters

Exam 1: The Purpose and Use of Financial Statements

Which of the following financial statements is concerned with the company at a point in time?

The accounting equation may be expressed as

The financial statement that summarizes the changes in common shares and retained earnings for a specific period of time is the

The statement of financial position

Debt and obligations of a business are referred to as

Anyone who works for a company but does not necessarily have access to accounting information to assist them in managing and operating the company is still considered to be an internal user.

Depreciation is the cost of certain long-lived assets allocated to expense for each period.

Financial statement users are interested in net income because it may be a predictor of future net income.

Dividends declared

The primary purpose of the statement of cash flows is to report

Net income for the period is determined by subtracting total expenses and dividends declared from revenues.

Authorities, such as the Canada Revenue Agency, want to know whether a business complies with the tax laws.

Which of the following uses accounting information to determine whether a company can pay its obligations?

Which of the following activities involves raising the necessary funds to support the business?

The reasons for a decrease in cash can be determined by examining the statement of income.

The users of private company financial statements do not have access to financial information beyond that available to the users of public company financial statements.

The statement of financial position is always the first statement prepared and presented.

Which of the following statements regarding external users is true?

Accounting communicates financial information about a business to both internal and external users.

Which financial statement would indicate whether the company relies more on debt or on shareholders' equity to finance its assets?

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters