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QUIZ #1

1. Communication consists of keeping a systematic chronological diary of events


measured in dollars and cents.
O A. True
C B. False

2. The cost principle states that assets should be recorded at their original historical
cost.
C A. True
O B. False

3. Expenses are decreases in owner's equity that result from operating the
business.
C A. True
O B. False

4. The receipt of cash on account will increase total assets.


O A. True
C B. False

5. The primary purpose of a cash flow statement is to provide financial information


about the cash receipts and cash payments of an enterprise.
C A. True
O B. False

6. The first part of the accounting process is:


O A. communicating.
C B. identifying.
O C. processing.
O D. recording.

7. Keeping a systematic chronological diary of events measured in dollars and cents


is called:
O A. communicating.
O B. identifying.
O C. processing.
C D. recording

8. Internal users of accounting information include all of the following except:


O A. company officers.
C B. investors.
O C. marketing managers.
O D. production supervisors.
9. Public accounting involves all of the following activities but has less of an
emphasis on:
O A. auditing.
C B. budgeting.
O C. business advisory services.
O D. taxation.

10. Ethics are the standards of conduct by which one's actions are judged as:
O A. right or .
O B. honest or dishonest.
O C. fair or unfair.
C D. all of these options.

11. An organization that establishes a set of accounting standards that are generally
accepted and practised is the:
C A. Canadian Institute of Chartered Accountants.
O B. Business Development Corporation.
O C. Canada Customs and Revenue Agency.
O D. Provincial Securities and Exchange Commission.

12. Combining the activities of Kellogg and General Mills would violate the:
O A. cost principle.
C B. economic entity assumption.
O C. monetary unit assumption.
O D. ethics principle.

13. A business organized as a separate legal entity under federal or provincial


corporate law and having ownership divided into transferable shares is a:
O A. proprietorship.
O B. partnership.
C C. corporation.
O D. sole proprietorship.

14. The resources owned by a business are called:


O A. revenues.
O B. owner's equity.
O C. liabilities.
C D. assets.

15. Net income results when:


O A. investments exceed drawings.
O B. revenues exceed drawings.
C C. revenues exceed expenses.
O D. expenses exceed revenues.
16. An example of an internal transaction is the:
O A. purchase of an asset.
O B. payment of a liability.
O C. performance of services.
C D. use of office supplies.

17. The investment of cash by the owner:


O A. increases revenues.
C B. increases owner's equity.
O C. decreases expenses.
O D. decreases assets.

18. Revenues and expenses are reported on the:


O A. balance sheet.
C B. income statement.
O C. statement of owner's equity.
O D. cash flow statement.

19. The ending owner's equity amount is shown on the:


O A. balance sheet only.
O B. statement of owner's equity only.
O C. cash flow statement.
C D. both the balance sheet and the statement of owner's equity.

20. Which of the following financial statements is prepared as of a specific date:


C A. balance sheet.
O B. income statement.
O C. statement of owner's equity.
O D. cash flow statement.