Question 1

A photo studio has a $25,000 loan from a bank and decides to pay it off using some of its cash. The transaction would be recorded as follows:

Accepted Answer

A)  increase cash (an asset) by $25,000; decrease bank loan (a liability) by $25,000. 
B)  increase cash (an asset) by $25,000; increase bank loan (a liability) by $25,000. 
C)  decrease bank loan (a liability) by $25,000; decrease cash (an asset) by $25,000. 
D)  decrease cash (an asset) by $25,000; increase bank loan (a liability) by $25,000. 
A)  increase cash (an asset) by $25,000; decrease bank loan (a liability) by $25,000. 
B)  increase cash (an asset) by $25,000; increase bank loan (a liability) by $25,000. 
C)  decrease bank loan (a liability) by $25,000; decrease cash (an asset) by $25,000. 
D)  decrease cash (an asset) by $25,000; increase bank loan (a liability) by $25,000.

Question 2

______ means that financial information must reflect the substance of the economic activity during the reporting period.

Accepted Answer

A)  Relevance 
B)  Understandability 
C)  Consistency 
D)  Representation faithfulness 
A)  Relevance 
B)  Understandability 
C)  Consistency 
D)  Representation faithfulness

Question 3

Tangible assets consist of equipment, buildings, patents, and inventories.

Accepted Answer

A) True 
 B)False

Question 4

Briefly define accrual accounting.

Accepted Answer

Accrual accounting records revenues and

Question 5

An owner withdraws capital through the repurchase of existing shares. On the company's 'statement of changes in equity', the amount of equity will increase.

Accepted Answer

A) True 
 B)False

Question 6

Public accountants typically perform all of the following tasks for a business client EXCEPT ______.

Accepted Answer

A)  developing the firm's marketing strategy 
B)  reviewing a firm's financial statements 
C)  tax planning 
D)  management consulting 
A)  developing the firm's marketing strategy 
B)  reviewing a firm's financial statements 
C)  tax planning 
D)  management consulting

Question 7

______ activities focus on selling goods and services.

Accepted Answer

A)  Investing 
B)  Financing 
C)  Operating 
D)  Marketing 
A)  Investing 
B)  Financing 
C)  Operating 
D)  Marketing

Question 8

Financing activities focus on providing valuable assets required to run a business.

Accepted Answer

A) True 
 B)False

Question 9

A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm must also have $15 million in liabilities.

Accepted Answer

A) True 
 B)False

Question 10

Accounting is the language of business.

Accepted Answer

A) True 
 B)False

Question 11

Explain the balance sheet and how it follows the accounting equation.

Accepted Answer

The balance sheet is a statement that sh

Question 12

A firm has total assets of $50 million and owner's equity of $40 million. What is the firm's debt ratio?

Accepted Answer

A)  20 percent 
B)  30 percent 
C)  50 percent 
D)  70 percent 
A)  20 percent 
B)  30 percent 
C)  50 percent 
D)  70 percent

Question 13

Complete the following using the terms listed below.
-A (n) ______ is anything of value owned or leased by a business.

Accepted Answer

A) Chartered Professional Accountant 
B) International Financial Reporting Standards 
C) Asset 
D) Liability 
E) owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Corruption of Foreign Public Officials Act
J)accrual accounting
K)open book management
L)Budget
M)GAAP
N)AcSB
O)profitability ratio
P)International Accounting Standards Committee
Q)liquidity ratios
R)budget 
A) Chartered Professional Accountant 
B) International Financial Reporting Standards 
C) Asset 
D) Liability 
E) owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Corruption of Foreign Public Officials Act
J)accrual accounting
K)open book management
L)Budget
M)GAAP
N)AcSB
O)profitability ratio
P)International Accounting Standards Committee
Q)liquidity ratios
R)budget

Question 14

Jackson, chief financial officer for a company, is interested in a summary of all the costs related to producing revenues for the most recent quarter. He can best find this information by consulting the ______ section of the ______.

Accepted Answer

A)  current asset; balance sheet 
B)  operating; cash flow statement 
C)  expense; income statement 
D)  current liability; balance sheet 
A)  current asset; balance sheet 
B)  operating; cash flow statement 
C)  expense; income statement 
D)  current liability; balance sheet

Question 15

The ______ was created by the Sarbanes-Oxley Act of 2002.

Accepted Answer

A)  Public Company Accounting Oversight Board 
B)  Securities & Exchange Commission 
C)  GAAP 
D)  FASB 
A)  Public Company Accounting Oversight Board 
B)  Securities & Exchange Commission 
C)  GAAP 
D)  FASB

Question 16

If a firm has a current ratio of 2.5, it means that for every $2.50 in ______ it has $1.00 in ______.

Accepted Answer

A)  total assets; total liabilities 
B)  total assets; current liabilities 
C)  current assets; current liabilities 
D)  current assets; total liabilities 
A)  total assets; total liabilities 
B)  total assets; current liabilities 
C)  current assets; current liabilities 
D)  current assets; total liabilities

Question 17

Complete the following using the terms listed below.
-______ measures the extent to which a firm relies on debt financing.

Accepted Answer

A) Chartered Professional Accountant 
B) International Financial Reporting Standards 
C) Asset 
D) Liability 
E) owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Corruption of Foreign Public Officials Act
J)accrual accounting
K)open book management
L)Budget
M)GAAP
N)AcSB
O)profitability ratio
P)International Accounting Standards Committee
Q)liquidity ratios
R)budget 
A) Chartered Professional Accountant 
B) International Financial Reporting Standards 
C) Asset 
D) Liability 
E) owners' equity
F)accounting equation
G)balance sheet
H)income statement
I)Corruption of Foreign Public Officials Act
J)accrual accounting
K)open book management
L)Budget
M)GAAP
N)AcSB
O)profitability ratio
P)International Accounting Standards Committee
Q)liquidity ratios
R)budget

Question 18

The earnings of a Canadian firm that has international operations generally ______ when the dollar is weak.

Accepted Answer

A)  decrease 
B)  increase 
C)  are not imacted 
D)  stay the same 
A)  decrease 
B)  increase 
C)  are not imacted 
D)  stay the same

Question 19

Companies often focus more on increasing revenue than on controlling costs. If the company can increase its revenue, it can remain in business for a long time.

Accepted Answer

A) True 
 B)False

Question 20

Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease by $1 million.

Accepted Answer

A) True 
 B)False

A photo studio has a $25,000 loan from a bank and decides to pay it off using some of its cash. The transaction would be recorded as follows:

______ means that financial information must reflect the substance of the economic activity during the reporting period.

Tangible assets consist of equipment, buildings, patents, and inventories.

Briefly define accrual accounting.

An owner withdraws capital through the repurchase of existing shares. On the company's 'statement of changes in equity', the amount of equity will increase.

Public accountants typically perform all of the following tasks for a business client EXCEPT ______.

______ activities focus on selling goods and services.

Financing activities focus on providing valuable assets required to run a business.

A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm must also have $15 million in liabilities.

Accounting is the language of business.

Explain the balance sheet and how it follows the accounting equation.

A firm has total assets of $50 million and owner's equity of $40 million. What is the firm's debt ratio?

Complete the following using the terms listed below. -A (n) ______ is anything of value owned or leased by a business.

Jackson, chief financial officer for a company, is interested in a summary of all the costs related to producing revenues for the most recent quarter. He can best find this information by consulting the section of the .

The ______ was created by the Sarbanes-Oxley Act of 2002.

If a firm has a current ratio of 2.5, it means that for every $2.50 in it has $1.00 in .

Complete the following using the terms listed below. -______ measures the extent to which a firm relies on debt financing.

The earnings of a Canadian firm that has international operations generally ______ when the dollar is weak.

Companies often focus more on increasing revenue than on controlling costs. If the company can increase its revenue, it can remain in business for a long time.

Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease by $1 million.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Contemporary Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management, Leadership, and the Internal Organization

Human Resource Management: From Recruitment to Labour Relations

Top Performance Through Empowerment, Teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

The Financial System

Financial Management

Filters

Exam 15: Understanding Accounting and Financial Statements

A photo studio has a $25,000 loan from a bank and decides to pay it off using some of its cash. The transaction would be recorded as follows:

______ means that financial information must reflect the substance of the economic activity during the reporting period.

Tangible assets consist of equipment, buildings, patents, and inventories.

Briefly define accrual accounting.

An owner withdraws capital through the repurchase of existing shares. On the company's 'statement of changes in equity', the amount of equity will increase.

Public accountants typically perform all of the following tasks for a business client EXCEPT ______.

______ activities focus on selling goods and services.

Financing activities focus on providing valuable assets required to run a business.

A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm must also have $15 million in liabilities.

Accounting is the language of business.

Explain the balance sheet and how it follows the accounting equation.

A firm has total assets of $50 million and owner's equity of $40 million. What is the firm's debt ratio?

Complete the following using the terms listed below. -A (n) ______ is anything of value owned or leased by a business.

Jackson, chief financial officer for a company, is interested in a summary of all the costs related to producing revenues for the most recent quarter. He can best find this information by consulting the ______ section of the ______.

The ______ was created by the Sarbanes-Oxley Act of 2002.

If a firm has a current ratio of 2.5, it means that for every $2.50 in ______ it has $1.00 in ______.

Complete the following using the terms listed below. -______ measures the extent to which a firm relies on debt financing.

The earnings of a Canadian firm that has international operations generally ______ when the dollar is weak.

Companies often focus more on increasing revenue than on controlling costs. If the company can increase its revenue, it can remain in business for a long time.

Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease by $1 million.

The Changing Face of Business

Business Ethics and Social Responsibility

Economic Challenges Facing Contemporary Business

Competing in World Markets

Forms of Business Ownership and Organization

Starting Your Own Business: the Entrepreneurship Alternative

Management, Leadership, and the Internal Organization

Human Resource Management: From Recruitment to Labour Relations

Top Performance Through Empowerment, Teamwork, and Communication

Production and Operations Management

Customer-Driven Marketing

Product and Distribution Strategies

Promotion and Pricing Strategies

Using Technology to Manage Information

The Financial System

Financial Management

Filters

Jackson, chief financial officer for a company, is interested in a summary of all the costs related to producing revenues for the most recent quarter. He can best find this information by consulting the section of the .

If a firm has a current ratio of 2.5, it means that for every $2.50 in it has $1.00 in .