Question 1

Which of the following would NOT affect owner's equity?

Accepted Answer

A)  a cash receipt from a customer in payment of account 
B)  payment of an expense 
C)  services provided for cash 
D)  withdrawal of funds for personal use 
A)  a cash receipt from a customer in payment of account 
B)  payment of an expense 
C)  services provided for cash 
D)  withdrawal of funds for personal use

Question 2

Shareholders' equity, in a corporation, at the end of the period is equal to

Accepted Answer

A)  shareholders' equity at the beginning of the period plus profit minus liabilities. 
B)  share capital plus retained earnings. 
C)  share capital plus dividends. 
D)  share capital plus this year's profit. 
A)  shareholders' equity at the beginning of the period plus profit minus liabilities. 
B)  share capital plus retained earnings. 
C)  share capital plus dividends. 
D)  share capital plus this year's profit.

Question 3

Analyze the transactions described below and indicate their effect on the basic accounting equation. Use a plus sign (+) to indicate an increase and a minus sign (-) to indicate a decrease.

Accepted Answer

The answer of Analyze the transactions described below and indicate...

Question 4

Accounting is the information system that identifies, records, and communicates the economic events of an organization to a wide variety of interested users.

Accepted Answer

A) True 
 B)False

Question 5

William Calvin owns and operates Sales Consulting, an unincorporated consulting firm. The following information is based on December 31, 2014 year end ending balances for the firm. (All amounts are in 000's).   Instructions 
a. Prepare the income statement for Sales Consulting.
b. Prepare the statement of owner's equity.
c. Prepare the balance sheet.

Accepted Answer

The answer of William Calvin owns and operates Sales Consulting,...

Question 6

Which of the following principles or assumptions requires that the activities of a business be kept distinct from those of its owner(s)?

Accepted Answer

A)  economic entity concept 
B)  going concern assumption 
C)  monetary unit assumption 
D)  cost principle 
A)  economic entity concept 
B)  going concern assumption 
C)  monetary unit assumption 
D)  cost principle

Question 7

Emily Hogan recently opened a new business. The business has been very successful and as a reward for all her hard work Emily spent a day at the local spa. Emily paid for the spa using a company credit card and charged the amount to the expense account called Repairs and Maintenance expense. Emily's actions violated which of the following?

Accepted Answer

A)  The going concern assumption 
B)  The monetary unit assumption 
C)  The cost principle 
D)  The economic entity concept 
A)  The going concern assumption 
B)  The monetary unit assumption 
C)  The cost principle 
D)  The economic entity concept

Question 8

An advantage of the corporation is that the shares of the corporation are easily transferable.

Accepted Answer

A) True 
 B)False

Question 9

Listed below, in alphabetical order, are the balance sheet items of Sing Company at December 31, 2013.   Instructions
Prepare a balance sheet and include a complete heading.

Accepted Answer

The answer of Listed below, in alphabetical order, are the...

Question 10

Ingrid Ltd and Bulgar Equipment rentals company sign a contract to rent equipment in the next two years. What is the impact on the accounting equation?

Accepted Answer

A)  Assets increase and liabilities increase. 
B)  Assets decrease and liabilities decrease. 
C)  No impact on the accounting equation. 
D)  Owner's equity increases and assets decrease. 
A)  Assets increase and liabilities increase. 
B)  Assets decrease and liabilities decrease. 
C)  No impact on the accounting equation. 
D)  Owner's equity increases and assets decrease.

Question 11

The common characteristic possessed by all assets is

Accepted Answer

A)  long life. 
B)  great monetary value. 
C)  tangible nature. 
D)  future economic benefit. 
A)  long life. 
B)  great monetary value. 
C)  tangible nature. 
D)  future economic benefit.

Question 12

Ogilvie Homes is a business owned by Joe Ogilvie. The accounting for this business is done by Joe's sister Leigh. Leigh is currently preparing the 2013 year end financial statements which Joe will use for three purposes:
1. to submit with his tax returns;
2. to support a loan application; and
3. to help him evaluate the success of the business.
Instructions
a. For each of the three purposes identified, describe the information needs the user will fulfill based on Ogilvie Home's financial statements.
b. Leigh has suggested that she can help Joe out by recording some January 2014 revenue in December 2013. She feels this is reasonable because it is just a slight timing difference and so "not really dishonest". Comment on the ethical implications of this suggestion and explain how each of the three users' needs may be affected if Leigh implements her suggestion.

Accepted Answer

a. Information needs for each of the thr

Question 13

When an owner, in a proprietorship or partnership, withdraws cash or other assets from a business for personal use, these withdrawals are termed

Accepted Answer

A)  expenses. 
B)  salary. 
C)  drawings. 
D)  a credit line. 
A)  expenses. 
B)  salary. 
C)  drawings. 
D)  a credit line.

Question 14

Which of the following is true when considering the accounting equation?

Accepted Answer

A)  An increase in an asset must always equal a decrease in a liability. 
B)  For every transaction an asset and a liability must be affected. 
C)  An increase in a liability must equal a decrease in owner's equity. 
D)  An increase in an asset may result in a decrease in another asset. 
A)  An increase in an asset must always equal a decrease in a liability. 
B)  For every transaction an asset and a liability must be affected. 
C)  An increase in a liability must equal a decrease in owner's equity. 
D)  An increase in an asset may result in a decrease in another asset.

Question 15

One item is omitted in each of the following summaries of balance sheet and income statement data for three different sole proprietorships, A, B, and C.   Instructions
Determine the amounts of the missing items, identifying each proprietorship by letter.

Accepted Answer

The answer of One item is omitted in each of...

Question 16

The proprietorship form of business organization

Accepted Answer

A)  must have at least three owners in most provinces. 
B)  represents the largest number of businesses in Canada. 
C)  combines the records of the business with the personal records of the owner. 
D)  is characterized by a legal distinction between the business as an economic unit and the owner. 
A)  must have at least three owners in most provinces. 
B)  represents the largest number of businesses in Canada. 
C)  combines the records of the business with the personal records of the owner. 
D)  is characterized by a legal distinction between the business as an economic unit and the owner.

Question 17

Which of the following would best be described as an ownership claim on a company's assets?

Accepted Answer

A)  expenses 
B)  account receivable from the owner 
C)  owner's equity 
D)  liabilities 
A)  expenses 
B)  account receivable from the owner 
C)  owner's equity 
D)  liabilities

Question 18

A private company is one that issues shares to the public.

Accepted Answer

A) True 
 B)False

Question 19

Recognition is the process of recording a transaction in the accounting records.

Accepted Answer

A) True 
 B)False

Question 20

Accounts payable is the asset created when a company sells services or products to customers who promise to pay cash in the future.

Accepted Answer

A) True 
 B)False

Which of the following would NOT affect owner's equity?

Shareholders' equity, in a corporation, at the end of the period is equal to

Analyze the transactions described below and indicate their effect on the basic accounting equation. Use a plus sign (+) to indicate an increase and a minus sign (-) to indicate a decrease.

Accounting is the information system that identifies, records, and communicates the economic events of an organization to a wide variety of interested users.

Which of the following principles or assumptions requires that the activities of a business be kept distinct from those of its owner(s)?

An advantage of the corporation is that the shares of the corporation are easily transferable.

Listed below, in alphabetical order, are the balance sheet items of Sing Company at December 31, 2013. Instructions Prepare a balance sheet and include a complete heading.

Ingrid Ltd and Bulgar Equipment rentals company sign a contract to rent equipment in the next two years. What is the impact on the accounting equation?

The common characteristic possessed by all assets is

When an owner, in a proprietorship or partnership, withdraws cash or other assets from a business for personal use, these withdrawals are termed

Which of the following is true when considering the accounting equation?

One item is omitted in each of the following summaries of balance sheet and income statement data for three different sole proprietorships, A, B, and C. Instructions Determine the amounts of the missing items, identifying each proprietorship by letter.

The proprietorship form of business organization

Which of the following would best be described as an ownership claim on a company's assets?

A private company is one that issues shares to the public.

Recognition is the process of recording a transaction in the accounting records.

Accounts payable is the asset created when a company sells services or products to customers who promise to pay cash in the future.

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 1: Accounting in Action

Which of the following would NOT affect owner's equity?

Shareholders' equity, in a corporation, at the end of the period is equal to

Analyze the transactions described below and indicate their effect on the basic accounting equation. Use a plus sign (+) to indicate an increase and a minus sign (-) to indicate a decrease.

Accounting is the information system that identifies, records, and communicates the economic events of an organization to a wide variety of interested users.

Which of the following principles or assumptions requires that the activities of a business be kept distinct from those of its owner(s)?

An advantage of the corporation is that the shares of the corporation are easily transferable.

Listed below, in alphabetical order, are the balance sheet items of Sing Company at December 31, 2013. Instructions Prepare a balance sheet and include a complete heading.

Ingrid Ltd and Bulgar Equipment rentals company sign a contract to rent equipment in the next two years. What is the impact on the accounting equation?

The common characteristic possessed by all assets is

When an owner, in a proprietorship or partnership, withdraws cash or other assets from a business for personal use, these withdrawals are termed

Which of the following is true when considering the accounting equation?

One item is omitted in each of the following summaries of balance sheet and income statement data for three different sole proprietorships, A, B, and C. Instructions Determine the amounts of the missing items, identifying each proprietorship by letter.

The proprietorship form of business organization

Which of the following would best be described as an ownership claim on a company's assets?

A private company is one that issues shares to the public.

Recognition is the process of recording a transaction in the accounting records.

Accounts payable is the asset created when a company sells services or products to customers who promise to pay cash in the future.

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters