Accounting and Financial Statements
Question Bank
Course Introduction
This course introduces the fundamental concepts of accounting and the preparation and interpretation of financial statements. Students will learn how to record business transactions, understand the accounting cycle, and prepare key reports such as the balance sheet, income statement, and cash flow statement. Emphasis is placed on analyzing financial information to assess the health and performance of an organization. The course also covers basic principles of internal controls and ethical considerations in financial reporting, equipping students with the skills necessary to evaluate financial disclosures and make informed business decisions.
Recommended Textbook
Financial Accounting 4th Canadian Edition by Robert; Libby
Available Study Resources on Quizplus
13 Chapters
1686 Verified Questions
1686 Flashcards
Source URL: https://quizplus.com/study-set/3872
Page 2
Chapter 1: Financial Statements and Business Decisions
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/77165
Sample Questions
Q1) Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers.
A)True
B)False
Answer: True
Q2) Repayment of a bank loan is classified on the statement of cash flows as an operating activity.
A)True
B)False
Answer: False
Q3) Which of the following activities would cause investors to overpay for the acquisition of a company from its current owners?
A)Understated accounts payable and overstated inventory.
B)Understated revenues and overstated expenses.
C)Understated assets and overstated expenses.
D)Understated assets and overstated revenues.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Investing and Financing Decisions and the Accounting System
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/77160
Sample Questions
Q1) Which of the following is the principle that requires us to record assets at the historical cash-equivalent cost?
A)Cost-benefit.
B)Cost principle.
C)Full disclosure.
D)Revenue recognition.
Answer: B
Q2) The best interpretation of the word credit is the
A)offset side of an account.
B)increase side of an account.
C)right side of an account.
D)decrease side of an account.
Answer: C
Q3) Liabilities are generally classified on a statement of financial position as A)small liabilities and large liabilities.
B)present liabilities and future liabilities.
C)tangible liabilities and intangible liabilities.
D)current liabilities and non-current liabilities.
Answer: D
Page 4
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Operating Decisions and the Accounting System
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/77159
Sample Questions
Q1) Which of the following businesses would most likely have the shortest operating cycle?
A)A retail chain such as Walmart
B)A jewellery manufacturer such as Mappins
C)A grocery chain such as Loblaws
D)A pizza franchise such as Pizza Pizza
Answer: D
Q2) The category that is generally considered to be the best measure of a company's ability to continue as a going concern is
A)cash flows from investing activities.
B)cash flows from operating activities.
C)cash flows from financing activities.
D)usually different from year to year.
Answer: B
Q3) Expenses are recognized when an exchange takes place of productive assets,the earnings process is complete or nearly complete,and collection is likely.
A)True
B)False
Answer: False
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Adjustments,financial Statements,and the Quality of Earnings
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/77158
Sample Questions
Q1) Earnings per share is widely used in evaluating the operating performance and profitability of a company and is the only ratio required to be disclosed on the statement or in the notes to the financial statements.
A)True
B)False
Q2) Because of its complexity and susceptibility to errors,which step in the process do independent auditors examine most closely?
A)financial statement preparation
B)tax reports
C)deferred and accrued adjustments
D)closing entries
Q3) Expenses paid in advance of the use of services or goods give rise to an asset until the goods and services are used,consumed,or expired.
A)True
B)False
Q4) The unadjusted trial balance does not reflect adjusting entries.
A)True
B)False
Q5) Is the adjusted trial balance a financial statement? Explain why or why not.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Communicating and Interpreting Accounting Information
Available Study Resources on Quizplus for this Chatper
108 Verified Questions
108 Flashcards
Source URL: https://quizplus.com/quiz/77157
Sample Questions
Q1) Matlock Company reported total sales revenue of $55,000 and total expenses amounting to $45,000 on its income statement for the year ended December 31,20B.During 20B,trade receivables decreased by $4,000,merchandise inventory decreased by $6,000,trade payables increased by $2,000 and depreciation of $8,000 was recorded.Therefore,based only on this information,the net cash flow from operating activities for 20B was which of the following?
A)$10,000.
B)$18,000.
C)$19,000.
D)$30,000.
Q2) How should the statement of cash flows be dated?
A)December 31,20X.
B)At Year-End December 31,20X.
C)For the Year Ended December 31,20X.
D)At December 31,20X.
Q3) When using the indirect method,a loss on the sale of equipment should be added to profit to derive cash flows from operating activities.
A)True
B)False
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Reporting and Interpreting Sales Revenue, receivables, and Cash
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/77156
Sample Questions
Q1) On January 1,20A,Virginia Company had $22,000 of Retained Earnings.During 20A Virginia earned profit of $40,000 and declared and paid dividends of $20,000.In addition,the company received cash of $15,000 as an additional investment by its owners.What is the ending balance in Retained Earnings at December 31,20A?
A)$32,000.
B)$42,000.
C)$57,000.
D)$67,000.
Q2) The adoption of International Financial Reporting Standards will help improve comparability of similar companies in different countries.
A)True
B)False
Q3) We calculate return on equity (ROE)by dividing profit by average shareholders' equity.
A)True
B)False
Q4) Trade payables are obligations classified as long-term liabilities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Reporting and Interpreting Cost of Goods Sold and Inventory
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/77155
Sample Questions
Q1) When a depositor receives a bank statement indicating a "NSF cheque," what should he do?
A)credit a special receivable for the amount of the cheque.
B)record the amount as an expense of the current period.
C)credit the cash account for the amount of the cheque.
D)debit sales revenue.
Q2) A Co.and G Co.are competitors in the biotechnology market.In 2012,A Co.reported a gross profit percentage of 86.3% while G Co's percentage was 80.7%.What is the most likely cause of G Co.'s lower gross profit percentage?
A)Increased product selling prices
B)Decreased product costs
C)Smaller scale operations than A Co.
D)Larger scale operations than A Co.
Q3) For most merchandisers and manufacturers,the required revenue recognition point is the time of shipment or delivery of goods.
A)True
B)False
Q4) What are "cash equivalents"? Specifically where would they appear on the financial statements?
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Reporting and Interpreting Property, plant, and Equipment; Intangibles; and Natural Resources
Available Study Resources on Quizplus for this Chatper
142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/77154
Sample Questions
Q1) "Toys 4 U" had cost of goods sold in 2012 of $8,191 million and $7,710 million in 2011.Their merchandise inventory in 2012 was $1,902 million and $2,464 million in 2011.What was their inventory turnover in 2012?
A)3.64
B)3.53
C)4.31
D)3.75
Q2) The cost of goods sold account is which of the following?
A)an asset
B)a contra-asset
C)an extraordinary item
D)an expense
Q3) The following information was taken from the 20B income statement of Milburn Company: Pretax profit,$12,000; Total operating expenses,$20,000; Sales revenue,$120,000.Compute the cost of goods sold.
A)$88,000
B)$100,000
C)$108,000
D)$112,000
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Reporting and Interpreting Liabilities
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/77153
Sample Questions
Q1) Intangible assets include which of the following?
A)Natural resources,patents,and trademarks.
B)Trade receivables,franchises,and trademarks.
C)Copyrights,licenses,and land.
D)Leaseholds,patents,and copyrights.
Q2) Which of the following statements is false?
A)Depreciation expense is added to profit in the operating activities section of the statement of cash flows because it had no cash effect on profit under the indirect method.
B)Depreciation expense is included in the investing activities section of the cash flow statement.
C)The only cash effect for depreciation is the tax savings provided by its deduction to derive taxable income.
D)Depreciation is a non-cash expense that reduces profit but involves no outflow of cash.
Q3) The consistency principle requires we use only one method of depreciation for all our types of operational assets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Reporting and Interpreting Bond Securities
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/77164
Sample Questions
Q1) The journal entry required on the company's books to record the note payable on July 1,20A would include which of the following?
A)A credit to notes payable for $12,000.
B)A credit to notes payable for $12,960.
C)A debit to cash for $11,040.
D)A debit to interest expense for $960.
Q2) Mild Company borrowed $5,000 on an 8% (annual rate)interest-bearing note payable on March 1,20C.The maturity date of the note (and payment of all interest)is September 1,20D.The accounting period ends December 31.Give the entry for each of the following dates.Assume simple interest.Round to the nearest dollar.
Q3) In 2012,P Co reported an increase in trade receivables of $303 million,and an increase in inventory of $284 million.They also experienced an increase in short-term borrowings of $3,921 million and an increase in trade payables of $253 million.Calculate the net cash effect of these changes.
A)$3,587 million decrease
B)$4,761 million increase
C)$3,587 million increase
D)$4,761 million decrease
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Reporting and Interpreting Stockholders Equity
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/77163
Sample Questions
Q1) Amortization of a premium on a bond payable increases interest revenue.
A)True
B)False
Q2) In 2012,P Co reported profit of $1,933 million,interest expense of $395 million and income taxes of $270 million.In 2011,they reported profit of $2,142 million,interest expense of $478 million and income taxes of $818 million.Calculate the times interest earned ratio for 2012 and 2011,respectively.
A)5.05 and 4.48 times
B)6.58 and 7.19 times
C)5.73 and 6.19 times
D)6.05 and 5.48 times
Q3) A bond liability usually should be reclassified as a current liability when the maturity date of a bond issue is within one year of the current statement of financial position date,or within the operating cycle (whichever is longer).
A)True
B)False
Q4) A corporation cannot retire bonds before their maturity date.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/77162
Sample Questions
Q1) If a corporation issues 1,000 of its shares for $15 per share,contributed capital increases by $15,000.
A)True
B)False
Q2) Fabulous Corporation plans to raise $500,000 cash on January 1,20A,by issuing either (not both)bonds payable (8% interest rate)or cumulative preferred shares (8% dividend rate).The accounting period ends December 31.How would the annual interest amount or annual dividend amount (if paid)affect the amount of profit for 20A?
A)Annual profit would be reduced by the annual interest and by the preferred share dividends.
B)Annual profit would be reduced by the interest but not by the preferred share dividends.
C)Annual profit would not be reduced by the annual interest or by the preferred share dividends.
D)Annual profit would be reduced by the preferred dividends but not by the interest.
Q3) The date of payment for a cash dividend is before the date of record.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Analyzing Financial Statements
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/77161
Sample Questions
Q1) Nunn Company reported the following data: What was the current ratio?
A)0.5 to 1
B)0.75 to 1
C)1.5 to 1
D)2.5 to 1
Q2) Calculate C Co's return on assets (ROA)for 2012.
A)11.9%
B)13.0%
C)13.6%
D)17.7%
Q3) Long-term creditors are usually most interested in evaluating A)liquidity.
B)marketability.
C)profitability.
D)solvency.
Q4) Short-term creditors are usually most interested in assessing A)solvency.
B)liquidity.
C)marketability.
D)profitability.
To view all questions and flashcards with answers, click on the resource link above. Page 15