NETA Test Bank to accompany
Prepared by Tamera Ebl University of British Columbia
NETA Assessment: Test Bank to accompany Cornerstones of Financial Accounting, Third Canadian Edition by Jay Rich, Jefferson P. Jones, Maryanne M. Mowen, Done R. Hansen, Donald Jones, Ralph Tassone Test Bank prepared by Tamara Ebl, University of British Columbia
NETA Copyeditor: Karen Rolfe Available at http://www.nelson.com/login, http://login.cengage.com, http://www.nelson.com/instructor
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TABLE OF CONTENTS
Preface Chapter 1 Financial Statements and Decision Making ................................................................... 1-1 Chapter 2 The Accounting Information System and Financial Statements..................................... 2-1 Chapter 3 Accrual Accounting and Financial Statements ............................................................... 3-1 Chapter 4 Internal Control and Cash ............................................................................................... 4-1 Chapter 5 Receivables and Revenue Reporting, and Analyzing Sales............................................ 5-1 Chapter 6 Reporting and Analyzing Inventory and Cost of Goods Sold ........................................ 6-1 Chapter 7 Reporting and Analyzing Property, Plant, and Equipment; Intangibles; Goodwill; and Natural Resources ........................................................................................................................... 7-1 Chapter 8 Reporting and Analyzing Current Liabilities.................................................................. 8-1 Chapter 9 Reporting and Analyzing Noncurrent Liabilities ............................................................ 9-1 Chapter 10 Reporting and Analyzing Shareholders‘ Equity .......................................................... 10-1 iv
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Chapter 11 Reporting and Analyzing the Statement of Cash Flows ............................................... 11-1 Chapter 12 Analysis and Interpretation of Financial Statements .................................................... 13-1
1. The majority of business in Canada is conducted by corporations. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy REFERENCES: <B Head> Forms of Business Organization QUESTION TYPE: True/False LEARNING OBJECTIVES:1.2 - Identify forms of business organization and business activities. KEYWORDS: Bloom‘s Remember
2. The three main business activities are financing, operating, and investing. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy REFERENCES: <B Head> Business Activities QUESTION TYPE: True/False LEARNING OBJECTIVES:1.2 - Identify forms of business organization and business activities. KEYWORDS: Bloom‘s Remember
3. Internal users of accounting information include present creditors and management. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy REFERENCES: <A Head> Financial Statements and Making Business Decisions QUESTION TYPE: True/False LEARNING OBJECTIVES:1.1 - Identify the users of financial statements. KEYWORDS: Bloom‘s Remember
4. The statement of earnings summarizes the assets, liabilities, and shareholders‘ equity for a period of time. a. True
b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy REFERENCES: <B Head> The Four Basic Financial Statements QUESTION TYPE: True/False LEARNING OBJECTIVES:1.3 - Understand the basic accounting equation. 1.4 - Understand how a statement of financial position is prepared and used. KEYWORDS: Bloom‘s Remember
5. The four basic financial statements prepared by private companies are the statement of earnings, statement of retained earnings, statement of financial position (or statement of financial position), and statement of cash flows. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy REFERENCES: <B Head> The Four Basic Financial Statements QUESTION TYPE: True/False LEARNING OBJECTIVES:1.3 - Understand the basic accounting equation. KEYWORDS: Bloom‘s Remember
6. The amount of earnings distributed to shareholders can be found in the statement of earnings as an expense. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate REFERENCES: <B Head> Using Statement of Earnings Information QUESTION TYPE: True/False LEARNING OBJECTIVES:1.5 - Understand how a statement of earnings is prepared and used. 1.6 - Understand how a statement of changes in equity is prepared and used. KEYWORDS: Bloom‘s Higher Order
7. Shareholders‘ equity is composed of two main sources: liabilities and contributed capital. a. True b. False ANSWER: False POINTS: 1 vi
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DIFFICULTY: Easy REFERENCES: <B Head> Preparing a Statement of Financial Position QUESTION TYPE: True/False LEARNING OBJECTIVES:1.4 - Understand how a statement of financial position is prepared and used. KEYWORDS: Bloom‘s Remember
8. Accounting standards require that the statement of financial position be prepared on a classified basis. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy REFERENCES: <B Head> Elements QUESTION TYPE: True/False LEARNING OBJECTIVES:1.4 - Understand how a statement of financial position is prepared and used. KEYWORDS: Bloom‘s Remember
9. For a private company, the only financial statement that reports the retained earnings balance at the end of the period is the statement of retained earnings. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate REFERENCES: <A Head> Financial Statements and Making Business Decisions QUESTION TYPE: True/False LEARNING OBJECTIVES:1.4 - Understand how a statement of financial position is prepared and used. 1.6 - Understand how a statement of changes in equity is prepared and used. KEYWORDS: Bloom‘s Higher Order
10. A statement of earnings 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. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate REFERENCES: <B Head> The Four Basic Financial Statements QUESTION TYPE: True/False LEARNING OBJECTIVES:1.5 - Understand how a statement of earnings is prepared and used.