Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Burnley test bank
CPA: Financial Reporting
AACSB: Analytic
79. The Statement of Income is also known as
a) Statement of Operations.
b) Statement of Earnings.
c) Statement of Profit or Loss.
d) All of the choices are correct.
Answer: d
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic
80. Who determines the amount of earnings to be paid as dividends?
a) management
b) board of directors
c) shareholders
d) regulators
Answer: b
Bloomcode: Knowledge
Difficulty: Medium
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic
81. The working capital equation is
a) Working Capital = Current Assets – Current Liabilities.
b) Working Capital = Current Assets + Current Liabilities.
c) Working Capital = Current Assets – Non-Current Liabilities.
d) Working Capital = Non-current Assets + Current Liabilities.
Answer: a
Bloomcode: Knowledge
Difficulty: Medium
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic
82. The accounting equation is
a) Assets = Liabilities – Shareholders’ Equity.
b) Assets + Liabilities = Shareholders’ Equity.
c) Assets = Liabilities + Shareholders’ Equity.
d) Shareholders’ Equity – Liabilities = Assets.
Answer: c
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic
83. A characteristic of an asset is
a) a resource controlled by an entity.
b) a future economic outflow.
c) an event that will happen in the future.
d) that it results in an outflow of resources.
Answer: a
Bloomcode: Knowledge
Difficulty: Medium
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic
84. Licences, patents, trademarks, and copyrights are all examples of
a) current assets.
b) goodwill.
c) intangible assets.
d) short-term investments.
Answer: c
Bloomcode: Knowledge
Difficulty: Medium
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic
85. Goods held for resale to customers are called
a) Inventory.
b) Prepaid Deposits.
c) Property, Plant, and Equipment.
d) Intangible Assets.
Answer: a
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic
86. Amounts owed to customers for advance payments until the related goods or services have been provided are called
a) Accounts Payable.
b) Deferred Revenue.
c) Accrued Liabilities.
d) Deferred Income Taxes.
Answer: b
Bloomcode: Knowledge
Difficulty: Medium
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic
87. Measures the resources controlled by a company and the claims on resources at a given point in time.
a) Statement of Financial Position
b) Statement of Income
c) Statement of Cash Flows
d) Statement of Changes in Equity
Answer: a
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements.
CPA: Financial Reporting
AACSB: Analytic