Question 1

Where would the information about company operations be found?

Accepted Answer

A)  On the income statement.
B)  On the balance sheet.
C)  In the notes of the financial statements.
D)  In the statement of management responsibility.

Question 2

Which of the following is not a qualitative characteristic of accounting information?

Accepted Answer

A)  Comparability
B)  Reliability
C)  Liquidity
D)  Understandability

Question 3

Which of the following is a typical financing activity?

Accepted Answer

A)  Payment of dividends
B)  Payment of interest expense
C)  Payment of wages
D)  Purchases of inventory

Question 4

When the financial statements do not present fairly the financial position, results of operations, or cash flows of an entity in conformity with generally accepted accounting principles, the auditor should issue an) :

Accepted Answer

A)  Unqualified opinion
B)  Disclaimer of opinion
C)  Disqualified opinion
D)  Adverse opinion

Question 5

Determining the amount of a liability based on a written contract is an example of which of the following characteristics of accounting information?

Accepted Answer

A)  Comparability
B)  Neutrality
C)  Consistency
D)  Verifiability

Question 6

The change in retained earnings can be calculated as follows:

Accepted Answer

A)  Net income - dividends
B)  Net income + dividends
C)  Net income - interest
D)  Net income + interest

Question 7

Which of the financial statements provides information about the company's financial position?

Accepted Answer

A)  Income statement
B)  Balance sheet
C)  Statement of cash flows
D)  Statement of retained earnings

Question 8

Assets and liabilities are listed in the order of their liquidity on both classified and unclassified balance sheets.

Accepted Answer

A) True 
 B)False

Question 9

What are the two primary outside sources of funds for a business entity?

Accepted Answer

A)  Creditors and investors
B)  Creditors and suppliers
C)  Suppliers and shareholders
D)  Investors and shareholders

Question 10

The following are all types of professional accountants in Canada except?

Accepted Answer

A)  CA -Chartered Accountants
B)  CGA - Certified General Accountants
C)  CFA - Chartered Financial Accountants
D)  CMA - Certified Management Accountants

Question 11

A firm's activities can be divided into borrowing, investing, and operating.

Accepted Answer

A) True 
 B)False

Question 12

If a company operates in more than one significant segment they must disclose segmented information in the notes of the financial statements.What is the purpose of the segmented information?

Accepted Answer

A)  To aid competitors in understanding the business.
B)  To aid the user in assessing the overall risk of the company.
C)  To aid in the preparation of consolidated financial statements.
D)  To aid the user in assessing the liquidity of the company.

Question 13

Changes in financial position are reflected on the:

Accepted Answer

A)  Balance sheet
B)  Income statement
C)  Retained earnings statement
D)  Cash flow statement

Question 14

The shareholders typically elect which of the following to represent their interests:

Accepted Answer

A)  Senior Management
B)  Independent Auditors
C)  Board of Directors
D)  Chief Operating Officer

Question 15

Reliable information rests on the following fundamental characteristics:

Accepted Answer

A)  Relevance and neutrality
B)  Comparability and consistency
C)  Cost\benefit and materiality
D)  Verifiability and conservatism

Question 16

Which of the following is a section found in the statement of cash flows?

Accepted Answer

A)  Cash from lending activities
B)  Cash from shareholder activities
C)  Cash from financing activities
D)  Cash from borrowing activities

Question 17

Verifiability is one of the fundamental characteristics that make accounting information relevant.

Accepted Answer

A) True 
 B)False

Question 18

Where in the financial statements would a user find out which accounting policies management has selected to use?

Accepted Answer

A)  Statement of Management Responsibility
B)  Notes to the Financial Statements
C)  Auditors' Report
D)  Management Discussion and Analysis

Question 19

The shareholders are an example of an internal user of annual report information.

Accepted Answer

A) True 
 B)False

Question 20

The starting point in the operating activities section of the cash flow statement is:

Accepted Answer

A)  Sales revenue
B)  Retained earnings
C)  Beginning cash balance
D)  Net income

Exam 1: Overview of Corporate Financial Reporting

Reliable information rests on the following fundamental characteristics:

Correct AnswerverifiedShow Answer

The starting point in the operating activities section of the cash flow statement is:

Correct AnswerverifiedShow Answer

Which of the following is not a qualitative characteristic of accounting information?

Correct AnswerverifiedShow Answer

Verifiability is one of the fundamental characteristics that make accounting information relevant.

Correct AnswerverifiedShow Answer

Where would the information about company operations be found?

Correct AnswerverifiedShow Answer

When the financial statements do not present fairly the financial position, results of operations, or cash flows of an entity in conformity with generally accepted accounting principles, the auditor should issue an) :

Correct AnswerverifiedShow Answer

Which of the following is a typical financing activity?

Correct AnswerverifiedShow Answer

If a company operates in more than one significant segment they must disclose segmented information in the notes of the financial statements.What is the purpose of the segmented information?

Correct AnswerverifiedShow Answer

Where in the financial statements would a user find out which accounting policies management has selected to use?

Correct AnswerverifiedShow Answer

The change in retained earnings can be calculated as follows:

Correct AnswerverifiedShow Answer

The shareholders typically elect which of the following to represent their interests:

Correct AnswerverifiedShow Answer

The following are all types of professional accountants in Canada except?

Correct AnswerverifiedShow Answer

Which of the financial statements provides information about the company's financial position?

Correct AnswerverifiedShow Answer

The shareholders are an example of an internal user of annual report information.

Correct AnswerverifiedShow Answer

Changes in financial position are reflected on the:

Correct AnswerverifiedShow Answer

A firm's activities can be divided into borrowing, investing, and operating.

Correct AnswerverifiedShow Answer

Assets and liabilities are listed in the order of their liquidity on both classified and unclassified balance sheets.

Correct AnswerverifiedShow Answer

Which of the following is a section found in the statement of cash flows?

Correct AnswerverifiedShow Answer

Determining the amount of a liability based on a written contract is an example of which of the following characteristics of accounting information?

Correct AnswerverifiedShow Answer

What are the two primary outside sources of funds for a business entity?

Correct AnswerverifiedShow Answer

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