Financial Accounting 6th Canadian Edition Test Bank

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ExamName___________________________________MULTIPLE CHOICE.Choose the one alternative that best completes the statement or answers the question.1)What is the primary purpose of the statement of financial position?1)_______A)To measure the profit of a business up to a particular point in time.B)To report the financial position of the reporting entity at a particular point in time.C)To report the difference between cash inflows and cash outflows for the period.D)To report assets at their current market value at a particular point in time.2)On January 1, 20X1, two individuals invested $150,000 each to form HornbeckCorporation. Hornbeck had total revenues of $15,000 during 20X1 and $40,000 during20X2. Total expenses for the same periods were $8,000 and $22,000, respectively. Cashdividends paid out to shareholders totaled $6,000 in 20X1 and $12,000 in 20X2. Whatwas the ending balance in Hornbeck's retained earnings account at the end of 20X1 and20X2?2)_______A)$1,000 and $6,000 respectively.B)$1,000 and $7,000, respectively.C)$301,000 and $306,000 respectively.D)$7,000 and $19,000 respectively.3)The BAT Corporation had revenues of $110,000, expenses of $85,000, and an incometax rate of 20 percent in 20X2. What would profitaftertaxes be?3)_______A)$20,000.B)$25,000.C)$5,000.D)$15,000.4)Brown Corporation reported the following amounts at the end of the first year ofoperations, December 31, 20X1: Share capital $20,000; Sales revenue $95,000; Totalassets $85,000, No dividends, and Total liabilities $35,000. What would shareholders'equity and total expenses be?4)_______A)Shareholders' equity, $60,000 and expenses $75,000.B)Shareholders' equity, $50,000 and expenses $65,000.C)Shareholders' equity, $80,000 and expenses $40,000.D)Shareholders' equity, $80,000 and expenses $85,000.5)Which of the following wouldnotbe considered an internal user of accounting data?5)_______A)A creditor of a company.B)The controller of a company.C)The president of a company.D)A salesperson of a company.6)If total liabilities increased by $25,000 and shareholders' equity increased by $5,000during a period, then total assets must change by what amount and direction during thatsame period?6)_______A)$25,000 increase.B)$20,000 increase.C)$20,000 decrease.D)$30,000 increase.7)Which of the following activities involves raising the necessary funds to support thebusiness?7)_______A)Marketing.B)Financing.C)Investing.D)Operating.8)Buying assets needed to operate a business is an example of a(n)8)_______A)investing activity.B)purchasing activity.C)financing activity.D)operating activity.9)The common characteristic possessed by all assets is9)_______

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