Question 1 What does a balance sheet show?

Question 1

What does a balance sheet show?

a) All of the owner's personal assets and liabilities.

b) A financial picture of the business on a certain date.

c) The progress of the business over a period of time.

d) The market value of a business.

Question 2

How are assets listed on the Balance Sheet?

a) By their useful life

b) Alphabetical order

c) By their size

d) By liquidity

Question 3

Which of the following is a temporary account?

a) HST payable

b) Supplies expense

c) Merchandise inventory

d) Reginald Dwightm Capital

Question 4

What is an asset that is expected to last longer than one year called?

a) Fixed Asset

b) Capital Asset

c) All answers are correct

d) Long Term Asset

Question 5

Which GAAP requires accountants to record the value of an asset at the original purchase price?

a) Purchase Principle

b) Cost Principle

c) Matching Principle

d) Materiality Principle

Question 6

What is the purpose of closing entries?

a) To prepare financial statements.

b) To terminate the business as an operating entity.

c) To reset all assets, liabilities, and owner's capital accounts to zero balance in preparation for the next account period.

d) To transfer net income/loss and owner's drawings to the owner's capital account.

Question 7

What happens when an item subject to HST is sold by a business?

a) The seller will credit HST Payable.

b) The purchaser with credit HST Recoverable.

c) The business will debit HST Payable.

d) The seller includes the HST in the price of the item and credits the Revenue account.

Question 8

Which of the following is NOT a contra ledger account?

a) Drawings

b) Freight - in

c) Purchase Returns

d) Accumulated Ammortization

Question 9

What does a debit balance in the Income Summary account indicate?

a) The firm had a net income during the fiscal period.

b) The owner withdrew funds during the fiscal period.

c) The firm had more liabilities than assets.

d) The firm had a net loss during the fiscal period.

Question 10

Generally speaking, which of the statements regarding dollar signs is true?

a) Dollar signs appear on the first values for each column for each section, and on the total values for each section.

b) All answers are correct.

c) Dollar signs are not used on worksheets.

d) Dollar signs are not used on a trial balance.

Question 11

Generally speaking, what is the purpose of underlining?

a) To indicate final balances.

b) To indicate a mathematical calculation.

c) To indicate that numbers are not account balances but totals and subtotals.

d) All answers are correct.

Question 12

Using the information from Figure 1, what is the amortization for the first year?

a) The amount cannot be calculated

b) $1,250

c) $1,500

d) $15,000

Question 13

Using the information from Figure 1, what is the amortization for the second year?

a) $13,500

b) $12,000

c) $15,000

d) $1,125

Question 14

If current assets are $15,000 and current liabilities are $10,000, what is the current ratio?

a) 1.5 to 1

b) -$5,000

c) .7 to 1

d) $5,000

Question 15

 (1 point)

The following figures are found on an income statement:

Sales $300

Total Expenses $240

Net Income $60

Which of the following statements is correct when performing a vertical analysis on this income statement?

a) Sales is expressed as 50%.       

b) Net Income is expressed as 100%.

c) Net income is expressed as 20%.

d) Total Expenses is expressed as 85%.

Question 16

At the beginning of Year 1, the Supplies account had a debit balance of $1,350. During the year, the business purchased $1,150 of supplies. An inventory count at the end of the year revealed that $750 of supplies remained. What is the adjusting entry as a result of this information?

a) Debit Supplies Expense $1,750, Credit Supplies $1,750.

b) Debit Supplies Expense $750, credit Accumulated Depreciation: Supplies $750.

c) Debit Supplies Expense $750, Credit Supplies $750.

d) Debit Supplies Expense$1,150, Credit Supplies $1,150.

Question 17

A business had the following balances on the day it was to remit HST to the government?

HST Recoverable $2,278

HST Payable: $4,728.

What is the type and amount of the cheque?

a) The cheque to the government should be for $2,450.

b) The cheque to the government should be $4,728.

c) The refund from the government should be $2,450.

d) The refund from the government should be $2,278.

Question 18

The total assets figure on a balance sheet is $375,000. The total liabilities figure is $106,250. What is the owner's equity?

a) It is impossible to determine the owner's equity from the data given.

b) 72% of the assets.

c) 28% of the assets.

d) $268,750.

Question 19

A business purchased a one-year insurance policy costing $480 on April 15 of the current year. What is the amount of insurance expense to be recorded in the adjusting entry for the year ended December 31?

Question 19 options:

a) $320

b) $480

c) $280

d) $340

Question 20

A business purchased a box of paper for $8.95 and paid cash. The HST was $1.16. What is the journal entry to record this purchase?

a) Debit Supplies $8.95, debit HST Recoverable $1.16, credit cash $10.11.

b) Debit Supplies expense $8.95, debit HST Recoverable $1.16, credit cash $10.11.

c) Debit Supplies $8.95, credit HST Payable $1.16, credit cash $10.11.

d) Debit Supplies expense $10.11, credit cash $10.11.

Question 21

The accountant for Mrs. Sleekly has claimed a deduction on her taxes which was cancelled in the previous year's federal budget. Revenue Canada has reassessed her return. Mrs. Sleekly questions the accountant about the reassessment and the accountant replies, "Wow. I did not know that deduction had been cancelled." Which of the following Code of Ethical Principles and Rules of Conduct has the account breached?

a) Confidentiality

b) Deceptive Information

c) Due Care and Professional Judgement

d) There is no breach - everyone makes mistakes.

Question 22

In an effort to get feedback on an accounting issue, an Accounting Manager was discussing Tektroix balance figures and accounting ratios with a trusted college friend who is also an Accounting Manager for a competitor. Which of the following Code of Ethical Principles and Rules of Conduct has the account breached?

a) Confidnntiality

b) Due Care and Professional Judgement

c) There was no breach - everyone needs to consult at times

d) Deceptive Information

Question 23

a)  It is the book of original entry.

b) It provides a chronological record of business transactions.

c) It can be used as a reference to verify information in the ledger.

d) It presents the financial position of the business.

Question 24

 (1 point)

Which of the following questions is not answered by the income statement?

a) How much money was spent on advertising?

b) How much money did the firm earn in the period?

c) How much do clients owe the company?

d) How much money was spent on wages?

Question 25

What is the best meaning for a chart of accounts?

a) A table resembling the equation analysis sheet.

b)  A list of errors made in the accounting records for the period.

c) A list of the ledger accounts and their numbers arranged in ledger order.

d) A chart demonstrating the net income or net loss of the company.

Question 26

A Balance Sheet can be prepared from information in the ledger.

a) True

b) False

Question 27

A double underline indicates a final total.

a) True

b) False

Question 28

A truck that cost $10,000 and for which $6,000 is owed is listed on the Balance Sheet as $4,400.

a) True

b) False

Question 29

An asset account cannot have a credit balance. 

a) True

b) False

Question 30

Assets are listed in alphabetical order.

a) True

b) False

Question 31

Capital decreases on the credit side.

a) True

b) False

Question 32

Decimals and commas are necessary when working in a spreadsheet software program.

a) True

b) False

Question 33

Personal assets have no place on the business Balance Sheet.

a) True

b) False

Question 34

The heading of a Balance Sheet shows the date on which is was prepared.

a) True

b) False

Question 35

When revenue accounts are closed, the Income Summary account is debited. 

a) True

b) False

Question 36

Fill In The Blank

A group or file of accounts that shows the account balance is called a: (Blank)

.

Question 37

Fill In The Blank

A (Blank) is prepared to check the accuracy of a ledger.

Question 38

Fill In The Blank

Accounting entries are first recorded in the general (Blank)

.

Question 39

Fill In The Blank

Even though an asset has increases significantly in value, the (Blank) principle will generally prevent a company from reporting its current value.

Question 40

Fill In The Blank

Sales revenues minus the Cost of Goods Sold equals (Blank)

.

Question 41

Fill In The Blank

The accrual-basis of accounting, which requires companies to report expenses in the period that it helped earn revenue, is the (Blank) principle.

Question 42

Fill In The Blank

The amount a sole proprietorship gives to its owner for the owner's personal consumption is recorded as a debit to (Blank) and a credit to Cash.

Question 43

Fill In The Blank

The inventory system that is updated whenever an item is sold or new stock purchased is a (Blank) Inventory System.

Question 44

Fill In The Blank

The listing of all the accounts available for use in the accounting system is referred to as the (Blank).

Question 45

Fill In The Blank

The name of the financial statement that is also known as the Statement of Financial Position is the (Blank)

Question 46

Fill In The Blank

The term used to describe the amount entered on the left-side of an account is (Blank)

Question 47

Fill In The Blank

The word to describe the systematic allocation of the value of a fixed asset from the Balance Sheet to an Expense on the Income Statement is (Blank)

Question 48

Fill In The Blank

When a company's accounting year ends on December 31, the company's accounting year is referred to as a calendar year. When a company's accounting year ends on a date other than December 31, the company's accounting year is referred to as a (Blank)

Question 49

Fill In The Blank

When a customer purchases an item on account, the accounting clerk for the seller will debit Accounts (Blank)

Question 50

Fill In The Blank

When an accountant is faced with two acceptable alternatives for reporting an amount, the accounting guideline/principle/constraint that directs the accountant to select and report the amount that will result in less profit, less assets, or less liabilities is the (Blank) principle.