L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
62) The amount of net income shown on the income statement also appears on the:
A) balance sheet
B) statement of assets
C) statement of financial position
D) statement of retained earnings
Answer: D
Diff: 2 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
63) The balance sheet contains:
A) the amount of net income
B) the beginning balance in retained earnings
C) the ending balance in retained earnings
D) the amount of dividends paid to shareholders
Answer: C
Diff: 2 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
64) What is one component of shareholders' equity?
A) common shares
B) notes payable
C) property, plant, and equipment
D) cash
Answer: A
Diff: 1 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
65) Generally accepted accounting principles, or GAAP, are the rules and procedures established by the Canadian Institute of Chartered Professional Accountants (CICPA Handbook).
Answer: TRUE
Diff: 1 Type: TF
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
66) All corporations have to follow the same sections of the CICPA Handbook.
Answer: FALSE
Diff: 2 Type: TF
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
67) In accounting, the word "net" means after a subtraction.
Answer: TRUE
Diff: 2 Type: TF
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
68) Net earnings are calculated by taking a company's earnings less their dividends paid out.
Answer: FALSE
Diff: 2 Type: TF
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs