Business Accounting
Exam Answer Key
Course Introduction
Business Accounting provides students with a comprehensive understanding of the fundamental principles and practices of accounting within a business context. The course covers key topics such as the accounting cycle, preparation and analysis of financial statements, recording transactions, and managing assets, liabilities, and equity. Students will also explore budgeting, internal controls, and the use of accounting information for decision-making purposes. By the end of the course, students will have developed the foundational skills necessary to interpret financial data and support effective business management.
Recommended Textbook
Financial Accounting 1st Canadian Edition by Jeffrey Waybright
Available Study Resources on Quizplus
12 Chapters
1471 Verified Questions
1471 Flashcards
Source URL: https://quizplus.com/study-set/1487
Page 2
Chapter 1: Business, Accounting, and You
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/29536
Sample Questions
Q1) Celia buys a new machine for her shop on credit. What effect does this have on the accounting equation?
Answer: Increase liabilities and increase assets.
Q2) The accounting equation is Assets = __________+ __________
Answer: Assets = Liabilities + Shareholders' Equity
Q3) Which of the following types of organizations would produce goods?
A) Merchandising operation
B) Service operation
C) Not-for-profit operation
D) Manufacturing operation
E) Government operation
Answer: D
Q4) A net income or loss is shown on the __________.
Answer: income statement and the statement of changes in equity
Q5) In the accounting profession there are several areas of expertise. Name the four main areas of expertise.
Answer: Financial Accounting
Managerial Accounting
Taxation
Banking and Financial Services
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Analyzing and Recording Business Transactions
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/29537
Sample Questions
Q1) The order in which accounts appear in the chart of accounts is: __________.
Answer: assets, liabilities, shareholders' equity, revenues, expenses
Q2) An example of accounts with normal debit balances would be:
A) liabilities.
B) expenses.
C) revenues.
D) shareholders' equity.
E) retained earnings
Answer: B
Q3) A T-account is a way to visualize the increases and decreases to the value of an account.
A)True
B)False
Answer: True
Q4) A type of company asset in which a customer owes the company money would be a __________.
Answer: receivable
Q5) Dividends, accounts receivable, and buildings have normal balances of __________, __________, and __________, respectively.
Answer: debit, debit, and debit
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Adjusting and Closing Entries
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/29538
Sample Questions
Q1) Adjusting entries are completed before the unadjusted trial balance is prepared.
A)True
B)False
Answer: False
Q2) The accounts that are NOT closed are __________.
Answer: assets, liabilities, and shareholder's equity
Q3) A plot of land with a cost of $15,000, a salvage value of $3,000, and expected life of 20 years was purchased on September 1. What will be the depreciation expense recorded on December 31?
Answer: $0
Land is not depreciated.
Q4) Part of accrual accounting depends upon recording __________ entries at the end of the fiscal year.
Answer: adjusting
Q5) To prove the equality of the debit and credit balances in the general ledger accounts after the closing entries have been journalized and posted, prepare the adjustments.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Ethics, Internal Control, and Cash
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/29539
Sample Questions
Q1) A good internal control system does which of the following?
A) Guarantees the efficiency and effectiveness of operations
B) Reduces the risk of undetected errors
C) Provides absolute assurance that no errors will occur
D) Guarantees that fraud will be prevented
E) Reduces the risk of breaking the law
Q2) Having security measures, proper authorization channels, and restricted access to assets is an example of what element of internal control?
Q3) Persons who report unethical behavior are known as __________.
Q4) The journal entry to record the set-up of a petty cash fund is to debit Petty Cash and to credit Cash.
A)True
B)False
Q5) A code of behaviour defines the standards of behaviour that all members of an organization are expected to follow.
A)True
B)False
Q6) Employing competent employees would be an example of what element of internal control?
6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Accounting for a Merchandising Business
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/29540
Sample Questions
Q1) An invoice states 5/15, n/60. What does the 15 refer to?
Q2) When a retailer sells merchandise on account, the general entry for the sale would be a:
Q3) What would be the credit terms that allows a discount of 3% if payment is made within 15 days of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from the date of the invoice?
Q4) Cost of goods sold is part of general and administrative expenses.
A)True
B)False
Q5) Costs of Goods Sold includes which of the following?
A) The actual cost of the item
B) Administrative fees
C) Management salaries
D) Depreciation expense
E) Selling expense
Q6) The statement of retained earnings for a merchandiser is prepared differently than that of a service business.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Inventory
Available Study Resources on Quizplus for this Chatper
138 Verified Questions
138 Flashcards
Source URL: https://quizplus.com/quiz/29541
Sample Questions
Q1) The inventory system that uses the merchandise inventory account as an active account is called:
Q2) Inventory generates profit once it is stocked on the shelf. A)True B)False
Q3) What can a poor or declining inventory turnover tell you?
Q4) When inventory prices are rising, what is the effect on Inventory, Cost of Goods Sold, and Net Income under the FIFO method?
Q5) What is the method of valuing inventory that is based on the assumption that the oldest goods will be sold first?
Q6) Journalize the following transactions using the perpetual inventory method.
June 11 Purchased $6,700 of merchandise on account, terms 4/10, n/45.
June 14 Returned $990 of merchandise that was damaged for credit.
June 18 Paid balance of account from purchase of June 11.
Q7) Which method produces the lowest cost of goods sold and the highest gross profit when prices are increasing?
Q8) What does a manufacturer's goods available for sell represent?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Sales and Receivables
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/29542
Sample Questions
Q1) Journalize the following transactions for Allan Company using the allowance method:
April 21 Sold $560 of merchandise on account to Bill Smith.
June 30 Bill Smith filed bankruptcy and his account was written off.
August 1 Replaced Joe's $4,500 receivable balance with a 4%- 8month note.
Dec 31 Recorded Bad Debts Expense based on 6% of credit sales of $120,000
Dec 31 Recorded interest on the note.
Q2) On September 1, 2012, Kelly Company lent $2,400 to Tim on a 6-month 8% promissory note. The journal entry to record the note for Kelly would be __________.
Q3) Margaret is a customer of Tammy Company. The company wrote off her account of $1,200 on August 15. On October 12, she sent in a payment of $560. What is the journal entry that Tammy Company will record first to reinstate her account?
Q4) Using a 365-day year, what is the maturity value of a 55-day, 7% note for $23,000 rounded to the nearest cent?
Q5) Notes receivable generally include a charge for interest.
A)True B)False
Q6) What are the two methods of accounting for uncollectible accounts?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Long-Term Assets
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/29543
Sample Questions
Q1) What are securities that are actively managed in order to maximize profit as a result of short-term changes in price?
Q2) Information needed to compute a depletion charge per unit includes the:
A) estimated total amount of resources available for removal.
B) amount of resources removed during the period.
C) cumulative amount of resources removed.
D) amount of resources sold during the period.
Q3) Ordinary repairs are also called revenue expenditures because the expense is matched against the revenues for the period.
A)True
B)False
Q4) Would adding 30 rooms to an existing hotel be considered a betterment or an extraordinary repair?
Q5) Machinery that cost $57,000 and had accumulated depreciation of $46,000 was sold for $2,500. What is the journal entry to record this disposal?
Q6) Under Canadian ASPE, at what value is Property, Plant, and Equipment recorded on the balance sheet?
Q7) When is an asset considered impaired?
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Current Liabilities and Long-Term Debt
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/29544
Sample Questions
Q1) Journalize the following annual bond interest payments on June 30:
June 30 a. 10-year 8% $250,000 bond that sold for $300,000.
June 30 b. 5-year 5% $300,000 bond that sold for $280,000.
June 30 c. 5-year 10% $500,000 bond that sold for $500,000.
Q2) If a $6,000, 10% , 10-year bond was issued at 104 on October 1, 2011, how much interest will accrue on December 31 if interest payments are made annually?
A) None
B) $104
C) $150
D) $500
E) $105
Q3) A warranty is an example of a(n):
A) contingent liability.
B) known liability.
C) estimated liability.
D) settled liability.
E) unknown obligation.
Q4) When the likelihood of an obligation occurring is virtually certain, what is the accounting treatment under IFRS and Canadian ASPE?
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Corporations: Share Capital and Retained Earnings
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/29545
Sample Questions
Q1) The components of Shareholders' Equity include the following two major categories:
A) Contributed Capital and Accumulated Other Comprehensive Income.
B) Earned Capital and Contributed Surplus.
C) Contributed Capital and Earned Capital.
D) Share Capital and Retained Earnings.
E) Contributed Surplus and Earned Capital.
Q2) Why are shares not referred as "no-par shares"?
Q3) Return on common equity shows the relationship between __________ and __________.
Q4) What is an organization authorized to sell once it has become a corporation?
Q5) Identify and explain the four basic rights of a shareholder.
Q6) Casey Company reacquired 5,000 shares of its common stock for $13/share. The debit to treasury shares will be:
A) $10,000.
B) $65,000.
C) $75,000.
D) $5,000.
E) based on the last treasury stock transaction.
Page 12
Q7) What is the normal balance of the treasury shares account?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: The Cash Flow Statement
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/29546
Sample Questions
Q1) Identify the two formats for operating activities on the cash flow statement and explain the difference(s).
Q2) Operating cash flows under the indirect method starts with the net income for the period from the income statement.
A)True
B)False
Q3) The indirect method of formatting a cash flow statement starts with __________.
Q4) Current assets on the balance sheet would be affected by and be part of operating activities.
A)True
B)False
Q5) Identify the various sources and uses of cash in preparing the operating activities of the cash flow statement using the direct method.
Q6) A transaction that exchanged a building for shares of stock would be an investing activity and would appear on the cash flow statement.
A)True
B)False
Q7) What is the purpose of the cash flow statement?
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/29547
Sample Questions
Q1) The last section of an income statement report (before earnings per share data) is __________.
Q2) In computing trend percentages, the most recent year amounts become the base and are always set to 100%.
A)True
B)False
Q3) Isaiah Company has net income of $720,000, beginning total assets of $2,100,000, and ending total assets of $2,300,000. Isaiah's return on total assets is __________.
Q4) A distinguishable part of a business that is subject to a different set of risks and returns than other parts of the business is called a __________.
Q5) After income from continuing operations, the next section on an income statement is __________.
Q6) After the figure for net income appears on the income statement, __________ data is computed.
Q7) Inventory and prepaid expenses are NOT included in the computation of the __________ ratio.
Q8) The ratio that measures the productivity of total assets used is the __________.
Page 14
Q9) Which ratio measures the earnings of a company on each sales dollar?
To view all questions and flashcards with answers, click on the resource link above.