Question 1

Which of the following is true regarding the corporate form of business organization?

Accepted Answer

A)  Corporations are the most prevalent form of business organization. 
B)  Corporate businesses are generally smaller in size than partnerships and proprietor-ships. 
C)  The revenues of corporations are greater than the combined revenues of partnerships and proprietorships. 
D)  Corporations are separate legal entities organized exclusively under federal law. 
A)  Corporations are the most prevalent form of business organization. 
B)  Corporate businesses are generally smaller in size than partnerships and proprietor-ships. 
C)  The revenues of corporations are greater than the combined revenues of partnerships and proprietorships. 
D)  Corporations are separate legal entities organized exclusively under federal law.

Question 2

A corporation's ownership is divided into transferable shares.

Accepted Answer

A) True 
 B)False

Question 3

If services are provided for credit, in a proprietorship, then

Accepted Answer

A)  assets will decrease. 
B)  liabilities will increase. 
C)  owner's equity will increase. 
D)  liabilities will decrease. 
A)  assets will decrease. 
B)  liabilities will increase. 
C)  owner's equity will increase. 
D)  liabilities will decrease.

Question 4

Greg Stewart was reviewing his business activities at the end of the year (February 28, 2013) and decided to prepare a Statement of Owner's Equity. At the beginning of the year, his assets were $500,000 and his liabilities were $150,000. At the end of the year the assets had grown to $950,000 but liabilities had also increased to $300,000. The profit for the year was $420,000. Greg had withdrawn $120,000 during the year for his personal use.
Instructions
Prepare a Statement of Owner's Equity in good form.

Accepted Answer

The answer of Greg Stewart was reviewing his business activities...

Question 5

What is meant by the cost principle? Explain why the principle is used primarily when accounting for assets used in a business.
2. Explain the monetary unit assumption of accounting. Explain how a business may have competitive advantage(s) that are not reported in the financial statements due to this principle, and provide an example

Accepted Answer

1. Cost is the amount paid for the asset

Question 6

The heading of a balance sheet must identify the

Accepted Answer

A)  company, statement and time period. 
B)  statement and date. 
C)  company, statement and date. 
D)  company and date. 
A)  company, statement and time period. 
B)  statement and date. 
C)  company, statement and date. 
D)  company and date.

Question 7

The following are six questions that users of accounting information might ask about Redpath Auto Towing (Redpath).
Instructions
For each question, indicate who the decision maker is and whether it is an external or internal user.

Accepted Answer

The answer of The following are six questions that users...

Question 8

Judy and Marilyn met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a(n)

Accepted Answer

A)  non profit organization. 
B)  partnership. 
C)  corporation. 
D)  proprietorship. 
A)  non profit organization. 
B)  partnership. 
C)  corporation. 
D)  proprietorship.

Question 9

Which of the following would violate the economic entity concept?

Accepted Answer

A)  reporting amounts owed to the company's suppliers as a liability on the balance sheet. 
B)  reporting equipment owned and used in the business as an asset in the balance sheet. 
C)  reporting withdrawals by the owner as a drawing in the statement of owner's equity. 
D)  reporting the owner's personal sailboat as an asset on the balance sheet. 
A)  reporting amounts owed to the company's suppliers as a liability on the balance sheet. 
B)  reporting equipment owned and used in the business as an asset in the balance sheet. 
C)  reporting withdrawals by the owner as a drawing in the statement of owner's equity. 
D)  reporting the owner's personal sailboat as an asset on the balance sheet.

Question 10

The International Accounting Standards Board

Accepted Answer

A)  works to reduce differences in accounting practices across countries. 
B)  promotes unique accounting applications. 
C)  works to increase differences in accounting practices across countries. 
D)  only operates in countries which speak English. 
A)  works to reduce differences in accounting practices across countries. 
B)  promotes unique accounting applications. 
C)  works to increase differences in accounting practices across countries. 
D)  only operates in countries which speak English.

Question 11

A business organized as a corporation

Accepted Answer

A)  is not a separate legal entity in most provinces. 
B)  requires that shareholders be personally liable for the debts of the business. 
C)  is owned by its shareholders. 
D)  terminates when one of its original shareholders dies. 
A)  is not a separate legal entity in most provinces. 
B)  requires that shareholders be personally liable for the debts of the business. 
C)  is owned by its shareholders. 
D)  terminates when one of its original shareholders dies.

Question 12

Below are three lists of accounting information with missing amounts. Each list is independent of the others.   Instructions
Use the accounting equation to determine the missing amounts.

Accepted Answer

1. $450
2. $4,800
3.

Question 13

Which of the following transactions would NOT affect Cash?

Accepted Answer

A)  payment to a supplier on account 
B)  purchase of supplies on account 
C)  payment of salaries for the week 
D)  prepaying an insurance premium 
A)  payment to a supplier on account 
B)  purchase of supplies on account 
C)  payment of salaries for the week 
D)  prepaying an insurance premium

Question 14

Recognition in the accounting terminology means

Accepted Answer

A)  recognizing the difference between assets and liabilities. 
B)  recognizing the difference between income and expenses. 
C)  recognizing that initially transactions are recorded at fair value. 
D)  the process of recording a transaction in the accounting records. 
A)  recognizing the difference between assets and liabilities. 
B)  recognizing the difference between income and expenses. 
C)  recognizing that initially transactions are recorded at fair value. 
D)  the process of recording a transaction in the accounting records.

Question 15

The going concern assumption

Accepted Answer

A)  states that a company will not operate long enough to utilize assets and fulfill obligations. 
B)  assumes the company will continue to operate in the foreseeable future. 
C)  is inconsistent with the cost principle. 
D)  states that net worth is the most appropriate value at which to record assets. 
A)  states that a company will not operate long enough to utilize assets and fulfill obligations. 
B)  assumes the company will continue to operate in the foreseeable future. 
C)  is inconsistent with the cost principle. 
D)  states that net worth is the most appropriate value at which to record assets.

Question 16

Which of the following is NOT an advantage of the corporate form of business organization?

Accepted Answer

A)  limited liability of shareholders 
B)  transferability of ownership 
C)  unlimited personal liability for shareholders 
D)  unlimited life 
A)  limited liability of shareholders 
B)  transferability of ownership 
C)  unlimited personal liability for shareholders 
D)  unlimited life

Question 17

Profit results when

Accepted Answer

A) Assets > Liabilities. B) Revenues = Expenses. C) Revenues > Expenses. D) Revenues < Expenses. A) Assets > Liabilities. B) Revenues = Expenses. C) Revenues > Expenses. D) Revenues < Expenses.

Question 18

A corporation may be formed under either the provincial legislation or the federal legislation.

Accepted Answer

A) True 
 B)False

Question 19

Owner's equity is often referred to as

Accepted Answer

A)  residual equity. 
B)  leftovers. 
C)  spoils. 
D)  a second equity. 
A)  residual equity. 
B)  leftovers. 
C)  spoils. 
D)  a second equity.

Question 20

The following transactions represent part of the activities of Lewis Company for the first month of its existence. Indicate the effect of each transaction upon the total assets of the business by one of the following phrases: increased total assets, decreased total assets, or no change in total assets.
1. The owner invested cash to start the business.
2. Purchased a computer for cash.
3. Purchased office equipment with money borrowed from the bank.
4. Paid the first month's utility bill.
5. Collected an accounts receivable.
6. Owner withdrew cash from the business.

Accepted Answer

1. Increased total assets.
2.

Which of the following is true regarding the corporate form of business organization?

A corporation's ownership is divided into transferable shares.

If services are provided for credit, in a proprietorship, then

The heading of a balance sheet must identify the

The following are six questions that users of accounting information might ask about Redpath Auto Towing (Redpath). Instructions For each question, indicate who the decision maker is and whether it is an external or internal user.

Judy and Marilyn met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a(n)

Which of the following would violate the economic entity concept?

The International Accounting Standards Board

A business organized as a corporation

Below are three lists of accounting information with missing amounts. Each list is independent of the others. Instructions Use the accounting equation to determine the missing amounts.

Which of the following transactions would NOT affect Cash?

Recognition in the accounting terminology means

The going concern assumption

Which of the following is NOT an advantage of the corporate form of business organization?

Profit results when

A corporation may be formed under either the provincial legislation or the federal legislation.

Owner's equity is often referred to as

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 is true regarding the corporate form of business organization?

A corporation's ownership is divided into transferable shares.

If services are provided for credit, in a proprietorship, then

The heading of a balance sheet must identify the

The following are six questions that users of accounting information might ask about Redpath Auto Towing (Redpath). Instructions For each question, indicate who the decision maker is and whether it is an external or internal user.

Judy and Marilyn met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a(n)

Which of the following would violate the economic entity concept?

The International Accounting Standards Board

A business organized as a corporation

Below are three lists of accounting information with missing amounts. Each list is independent of the others. Instructions Use the accounting equation to determine the missing amounts.

Which of the following transactions would NOT affect Cash?

Recognition in the accounting terminology means

The going concern assumption

Which of the following is NOT an advantage of the corporate form of business organization?

Profit results when

A corporation may be formed under either the provincial legislation or the federal legislation.

Owner's equity is often referred to as

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