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Cornerstones Of Financial Accounting, First Canadian Edition Test Bank

Cornerstones Of Financial Accounting, First Canadian Edition Test Bank helps you stay ahead with key concepts, problem-solving approaches, and exam success strategies.

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    Test Bank to accompany Cornerstones of Financial Accounting, First Canadian Edition TABLE OF CONTENTS Chapter 1 Accounting and the Financial Statements ....................................................... 1-1 Chapter 2 The Accounting Information System .............................................................. 2-1 Chapter 3 Accrual Accounting......................................................................................... 3-1 Chapter 2 Internal Control and Cash ............................................................................... 4-1 Chapter 5 Revenue and Receivables ................................................................................ 5-1 Chapter 6 Cost of Goods Sold and Inventory .................................................................. 6-1 Chapter 7 Property, Plant, and Equipment; Intangibles; and Natural Resources ............ 7-1 Chapter 8 Current Liabilities ........................................................................................... 8-1 Chapter 9 Long-Term Liabilities ..................................................................................... 9-1 Chapter 10 Shareholders’ Equity ................................................................................... 10-1 Chapter 11 The Statement of Cash Flows...................................................................... 11-1 Chapter 12 Investments.................................................................................................. 12-1 Chapter 13 Financial Statement Analysis ...................................................................... 13-1

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    Chapter 1—Accounting and the Financial Statements TRUE/FALSE 1. The majority of business in Canada is conducted by corporations. ANS: T PTS: 1 DIF: Easy OBJ: 1-2 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 2. The three main business activities are financing, operating, and investing. ANS: T PTS: 1 DIF: Easy OBJ: 1-2 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-03-Business Forms 3. Internal users of accounting information include present creditors and management. ANS: F PTS: 1 DIF: Easy OBJ: 1-1 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 4. The income statement summarizes the assets, liabilities and shareholders’ equity for a period of time. ANS: F PTS: 1 DIF: Easy OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 5. The four basic financial statements are the income statement, statement of retained earnings, balance sheet, and statement of cash flows. ANS: T PTS: 1 DIF: Easy OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 6. The amount of earnings distributed to shareholders can be found in the income statement as an expense. ANS: F PTS: 1 DIF: Moderate OBJ: 1-5 | 1-6 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 7. Shareholders’ equity is composed of two main sources: liabilities and contributed capital. ANS: F PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 8. The first step in preparing the classified balance sheet is to list the assets in order of liquidity. ANS: F PTS: 1 DIF: Moderate REF: CS1-2 OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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    Chapter 1 Accounting and the Financial Statements Test Bank 9. The only financial statement that reports the retained earnings balance at the end of the period is the statement of retained earnings. ANS: F PTS: 1 DIF: Moderate OBJ: 1-4 | 1-6 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 10. An income statement provides information at one specific point in time, while the other basic financial statements provide information on activities that occur over a period of time. ANS: F PTS: 1 DIF: Moderate OBJ: 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 11. When an entity’s share issuances exceed its expenses for a period of time, the entity will report net income. ANS: F PTS: 1 DIF: Moderate REF: CS1-3 OBJ: 1-5 NAT: AICPA FN-Measurement | AACSB Communication | ACBSP-APC-09-Financial Statement 12. Contributed capital is the residual interest that remains after deducting liabilities from shareholders’ equity. ANS: F PTS: 1 DIF: Moderate REF: CS1-2 OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 13. The four steps in preparing the income statement are: 1) prepare a heading; 2) list the revenues of the company; 3) list the expenses of the company; and 4) list the dividends of the company. ANS: F PTS: 1 DIF: Moderate REF: CS1-3 OBJ: 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 14. Shareholders’ equity is composed of contributed capital and retained earnings. ANS: T PTS: 1 DIF: Moderate OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 15. The primary objective of internal auditors who are employees of the company is to provide assurance to the company’s shareholders that the financial statements are fairly presented. ANS: F PTS: 1 DIF: Easy OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 16. The independent auditor’s report conveys whether or not the business is a good investment. ANS: F PTS: 1 DIF: Moderate OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose

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    Chapter 1 Accounting and the Financial Statements Test Bank 17. The statement of cash flows shows cash inflows and cash outflows for a period of time. ANS: T PTS: 1 DIF: Moderate OBJ: 1-7 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 18. Because the four financial statements are interrelated (i.e., there is a natural progression from one financial statement to another), the balance sheet should be prepared first. ANS: F PTS: 1 DIF: Moderate OBJ: 1-8 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 19. The company’s annual report includes an audit report, notes to the financial statements, but NOT management’s discussion and analysis. ANS: F PTS: 1 DIF: Moderate OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 20. Investing is the business activity that measures the company’s ability to generate cash from its revenue and expense activities. ANS: F PTS: 1 DIF: Easy OBJ: 1-2 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-03-Business Forms 21. The owners of a sole proprietorship, partnership, and corporations have limited liability. ANS: F PTS: 1 DIF: Easy OBJ: 1-1 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 22. The purpose of financial reporting is to provide economic information to investors, creditors, and other financial statement users. ANS: T PTS: 1 DIF: Easy OBJ: 1-1 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 23. Creditors use accounting information to evaluate whether to loan money to a company. ANS: T PTS: 1 DIF: Easy OBJ: 1-1 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 24. Current assets include all of the following: cash, inventory, equipment, supplies, and accounts receivable. ANS: F PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 25. Current liabilities are typically listed in the order in which they will be paid. ANS: T PTS: 1 DIF: Moderate OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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    Chapter 1 Accounting and the Financial Statements Test Bank 26. Three common categories of long-term assets are: 1) property, plant, and equipment; 2) long-term investments; and 3) intangibles. ANS: T PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 27. In the shareholders’ equity section of a classified balance sheet, a distinction is made between amounts invested by owners and amounts financed by creditors. ANS: F PTS: 1 DIF: Moderate REF: CS1-2 OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 28. One primary purpose of a classified balance sheet is to help users evaluate the working capital of a company. ANS: T PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 29. A classified balance sheet is to help users determine how a company obtained its resources. ANS: T PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 30. The current ratio is useful in determining a company’s ability to pay obligations when they become due. ANS: T PTS: 1 DIF: Moderate OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-23-Financial Statement Analysis 31. Income from operations includes interest revenue and interest expense because these items are considered to be operating in nature. ANS: F PTS: 1 DIF: Moderate OBJ: 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 32. Net loss reduces a company’s retained earnings balance. ANS: T PTS: 1 DIF: Moderate REF: CS1-4 OBJ: 1-6 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 33. Dividend payments appear on the statement of retained earnings. ANS: T PTS: 1 DIF: Moderate REF: CS1-3 | CS1-4 OBJ: 1-6 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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    Chapter 1 Accounting and the Financial Statements Test Bank 34. The statement of cash flows, like the income statement, reports only operating activities and other activities of a company. ANS: F PTS: 1 DIF: Easy OBJ: 1-8 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 35. The ending cash balance is shown on the balance sheet and the statement of retained earnings. ANS: F PTS: 1 DIF: Moderate OBJ: 1-8 NAT: AICPA FN-Reporting |AACSB Communication | ACBSP-APC-09-Financial Statement 36. The company’s annual report includes a section called Management’s Discussion and Analysis. ANS: T PTS: 1 DIF: Moderate OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 37. Independent auditors render an opinion that the financial statements do or do not fairly present a company’s financial position, operating results, and cash flows. ANS: T PTS: 1 DIF: Moderate OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 38. An independent auditor’s report is a guarantee that the financial statements are free from fraud or material error. ANS: F PTS: 1 DIF: Moderate OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 39. In the independent auditors’ report included with the annual report, management discusses the financial statements and provides the shareholders with explanations for certain amounts reported in the statements. ANS: F PTS: 1 DIF: Moderate OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 40. A company with healthy cash flows from operating activities is in a good position to repay its debts. ANS: T PTS: 1 DIF: Easy OBJ: 1-7 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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    Chapter 1 Accounting and the Financial Statements Test Bank COMPLETION 1. External users and outside decision makers use ____________________ accounting. ANS: financial PTS: 1 DIF: Easy OBJ: 1-1 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 2. The three forms of business organizations are ____________________, ____________________, and ____________________. ANS: sole proprietorships, partnerships, corporations partnerships, corporations, sole proprietorships corporations, sole proprietorships, partnerships PTS: 1 DIF: Easy OBJ: 1-2 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-03-Business Forms 3. The type of business activity that relates to obtaining funds from either issuing shares or borrowing money is called ____________________. ANS: financing PTS: 1 DIF: Easy OBJ: 1-2 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-03-Business Forms 4. The names of the four basic financial statements are ____________________, ____________________, ____________________, and ____________________. ANS: income statement, balance sheet, statement of retained earnings, statement of cash flows balance sheet, statement of retained earnings, statement of cash flows, income statement statement of retained earnings, statement of cash flows, income statement, balance sheet statement of cash flows, income statement, balance sheet, statement of retained earnings PTS: 1 DIF: Easy OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 5. The fundamental accounting equation is ____________________ = ____________________ + ____________________. ANS: assets, liabilities, shareholders’ equity assets, shareholders’ equity, liabilities PTS: 1 DIF: Easy REF: CS1-1 OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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    Chapter 1 Accounting and the Financial Statements Test Bank 6. The step of listing the liabilities of the company in order of their time to maturity is performed for a financial statement called the ____________________. ANS: classified balance sheet PTS: 1 DIF: Moderate REF: CS1-2 OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 7. Current assets minus current liabilities is called ____________________. ANS: working capital PTS: 1 DIF: Moderate OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 8. The financial statement listing revenues, starting with sales revenue (service revenue), is called the ____________________. ANS: income statement PTS: 1 DIF: Easy REF: CS1-3 OBJ: 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 9. Both net income and dividends can be found on this financial statement: ____________________. ANS: statement of retained earnings PTS: 1 DIF: Easy REF: CS1-4 OBJ: 1-6 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 10. Net income from the income statement increases ____________________. ANS: retained earnings PTS: 1 DIF: Easy OBJ: 1-8 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 11. ____________________ have claims to an entity’s economic resources. ANS: Creditors Lenders Investors Shareholders PTS: 1 DIF: Moderate OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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    Chapter 1 Accounting and the Financial Statements Test Bank 12. ____________________ are cash and other assets that are reasonably expected to be converted into cash within one year or operating cycle, whichever is longer. ANS: Current Assets PTS: 1 DIF: Moderate OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 13. Property, plant, and equipment is classified as ____________________ assets on the balance sheet. ANS: noncurrent PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 14. ____________________ is a liquidity measure that is calculated by subtracting current assets from current liabilities. ANS: Working capital PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-23-Financial Statement Analysis 15. The ability of a company to pay its debt as it comes due relates to ____________________. ANS: liquidity PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-23-Financial Statement Analysis 16. In a(n) ____________________-step income statement, all expenses and losses are added together then deducted from the sum of all revenues and gains. ANS: single PTS: 1 DIF: Easy OBJ: 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 17. The statement of cash flows classifies cash flow into these three categories: ____________________, ____________________, and ____________________. ANS: operating, investing, financing investing, financing, operating financing, operating, investing PTS: 1 DIF: Easy OBJ: 1-7 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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    Chapter 1 Accounting and the Financial Statements Test Bank 18. The three financial statements in which net income can be found are the ____________________, ____________________, and ____________________. ANS: income statement, statement of retained earnings, statement of cash flows using the indirect method statement of retained earnings, statement of cash flows using the indirect method, income statement statement of cash flows using the indirect method, income statement, statement of retained earnings PTS: 1 DIF: Moderate OBJ: 1-8 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 19. The demand for accounting information comes from users both inside and outside the business. The five user groups discussed in the text include ____________________, ____________________, ____________________, ____________________, and ____________________. ANS: managers employees investors creditors governments PTS: 1 DIF: Easy OBJ: 1-1 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 20. The current ratio is found by dividing current assets by ____________________. ANS: current liabilities PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-23-Financial Statement Analysis

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    Chapter 1 Accounting and the Financial Statements Test Bank MATCHING Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.) a. investors b. management c. supplier d. banker e. government f. employees g. labour union h. investors and banker i. supplier and banker 1. prospects for future dividend payments 2. prospects for getting a raise this year 3. profitability of the company based upon the tax authorities 4. effectiveness of the last advertising campaign 5. exact amount of profit on each product of the company 6. ability of the company to pay its debts as they become due 7. company’s labour rate agreed to on the last contract 1. ANS: A PTS: 1 DIF: Challenging OBJ: 1-1 NAT: AICPA FN-Reporting | AACSB Analytic | ACBSP-APC-01-Purpose 2. ANS: F PTS: 1 DIF: Challenging OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Analytic | ACBSP-APC-01-Purpose 3. ANS: E PTS: 1 DIF: Challenging OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Analytic | ACBSP-APC-01-Purpose 4. ANS: B PTS: 1 DIF: Challenging OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Analytic | ACBSP-APC-01-Purpose 5. ANS: B PTS: 1 DIF: Challenging OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Analytic | ACBSP-APC-01-Purpose 6. ANS: I PTS: 1 DIF: Challenging OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 7. ANS: G PTS: 1 DIF: Challenging OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose

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    Chapter 1 Accounting and the Financial Statements Test Bank Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) a. assets b. liabilities c. revenues d. expenses e. shareholders’ equity 8. Inventory 9. Net sales 10. Unearned revenue 11. Interest income 12. Research and development expense 13. Accounts receivable 14. Common shares 15. Long-term notes payable 16. Cash 17. Retained earnings 18. Patents 8. ANS: A PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 9. ANS: C PTS: 1 DIF: Easy REF: CS1-3 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 10. ANS: B PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 11. ANS: C PTS: 1 DIF: Easy REF: CS1-3 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 12. ANS: D PTS: 1 DIF: Easy REF: CS1-3 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 13. ANS: A PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 14. ANS: E PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 15. ANS: B PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 16. ANS: A PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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    Chapter 1 Accounting and the Financial Statements Test Bank 17. ANS: E PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 18. ANS: A PTS: 1 DIF: Easy REF: CS1-2 OBJ: 1-4 | 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement Match each statement to the item listed below. a. cash flows from financing activities b. cash flows from investing activities c. cash flows from operating activities 19. cash flows directly related to earning income 20. cash flows related to obtaining capital for the company 21. cash flows related to the acquisition or sale of investment and long-term assets 19. ANS: C PTS: 1 DIF: Moderate OBJ: 1-7 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 20. ANS: A PTS: 1 DIF: Moderate OBJ: 1-7 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 21. ANS: B PTS: 1 DIF: Moderate OBJ: 1-7 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement Match each statement to the item listed below. a. current assets b. current liabilities c. gross margin d. income from operations e. intangible assets f. long-term investments g. long-term liabilities h. net profit margin 22. net sales less cost of goods sold expense 23. resources that provide a benefit over a number of years but which lack physical substance 24. investment in the debt and shares of other companies that is expected to be held for more than a year 25. obligations that must be satisfied within a year 26. net income divided by sales revenue 27. gross margin less operating expenses 28. obligations that will require payment beyond one year 29. cash and other resources that are expected to become cash or used up within a year’s time or less 22. ANS: C PTS: 1 DIF: Easy OBJ: 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 23. ANS: E PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 24. ANS: F PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 25. ANS: B PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 26. ANS: H PTS: 1 DIF: Easy OBJ: 1-5

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    Chapter 1 Accounting and the Financial Statements Test Bank NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 27. ANS: D PTS: 1 DIF: Easy OBJ: 1-5 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 28. ANS: G PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 29. ANS: A PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement Match each statement to the item listed below. a. audit report b. fiscal year c. financial statements d. management’s discussion and analysis e. notes to the financial statements 30. section in the annual report that highlights favourable or unfavourable trends and significant risks facing the company 31. accounting period that may or may not cover January 1–December 31 32. contains the auditor’s opinion as to whether the financial statements fairly present the company’s financial position and results of operations 33. set of reports that communicate a company’s financial position and results of operations 34. information that clarifies and expands upon the information presented in the financial statements 30. ANS: D PTS: 1 DIF: Easy OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 31. ANS: B PTS: 1 DIF: Easy OBJ: 1-4 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 32. ANS: A PTS: 1 DIF: Easy OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 33. ANS: C PTS: 1 DIF: Easy OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 34. ANS: E PTS: 1 DIF: Easy OBJ: 1-9 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement Match the statement to one of the items listed below. a. Financial Accounting Standards Board b. Generally accepted accounting principles c. International Accounting Standards Board d. International financial reporting standards e. Securities and Exchange Commission 35. organization currently working to establish international financial reporting standards 35. ANS: C PTS: 1 DIF: Easy OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement

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