Accounting Quiz

Topics: Balance sheet, Financial statements, Generally Accepted Accounting Principles Pages: 6 (1233 words) Published: August 8, 2014


ACCT112

Assignment 1 – Weeks 1 and 2
Due at the end of week 2. There are 41 marks. This assignment is worth 5 % of the total grade.

True or False: (10 Marks)

1.A balance sheet lists a company’s revenues and expenses for a period of time.
FALSE

2.The hiring of a new company president is an economic event recorded by the financial information system.
TRUE

3.Accounting communicates financial information about a company to both internal and external users.
TRUE

4.Financial statements are the major means of communicating accounting information to interested parties.
TRUE

5.The study of introductory accounting is relevant only to those who intend to pursue a career in professional accounting.
FALSE

6.Ethical dilemmas can be analyzed by applying a process involving three steps.
TRUE

7.Companies whose shares or debt trade publicly are not obliged to follow GAAP.
TRUE

8.Income trusts have become increasingly popular in large part because of their tax advantages.
TRUE

9.The cost and fair market value of an asset are the same at the time of acquisition and in all subsequent periods.
TRUE

10.The cost principle is used in accounting because historical cost is definite and verifiable.
TRUE

Multiple Choice: Select the most correct answer. (10 marks)

1. Accountants refer to an economic event as a
a.purchase.
b.sale.
c.transaction.
d.change in ownership.

2. The payment of salaries by an NHL team is an example of a(n)
a.sale.
b.economic event.
c.financial statement.
d.accounting record.

3. Communication of economic events is the part of the accounting process that involves
a.identifying economic events.
b.quantifying transactions into dollars and cents.
c.preparing and analyzing accounting reports.
d.recording and classifying information.

4.Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?
a.The appointment of a new CA firm to perform an audit
b.The purchase of a new computer
c.The sale of store equipment
d.Payment of property taxes

5.Which of the following is an example of an economic event that should be recorded as an accounting transaction?
a.The purchase of supplies
b.An increase in the market value of a company’s shares.
c.The appointment of a new Chief Executive Officer
d.The launch of a new marketing strategy

6.The accounting process involves all of the following except
a.identifying economic transactions that are relevant to the business.
b.communicating financial information to users by preparing financial reports.
c.recording nonquantifiable economic events.
d.analyzing and interpreting financial reports.

7. The accounting process is correctly sequenced as
a.identification, communication, recording.
b.recording, communication, identification.
c.identification, recording, communication.
d.communication, recording, identification.

8. Which of the following techniques are not used by accountants to interpret and report financial information?
a.Graphs
b.Trend analysis.
c.Charts
d.Ratios

9. Which of the following would not be considered an internal user of accounting data for the ABC Company?
a.President of the company
b.Production manager
c.Merchandise inventory clerk
d.President of the employees' labour union

10.Which of the following would not be considered an external user of accounting data for the ABC Company?
a.Canada Revenue Agency
b.Management
c.Creditors
d.Customers

Accounting: (21 marls)

Question 1: 3 marks

Ex. 3 (SO 2)
For each of the situations listed below, fill in the appropriate letter to indicate which of the following accounting assumptions have...
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