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Financial Accounting (FAC1501) – Assessment 1 |
Complete Summary, Exercises, and Solutions for
Accounting Principles and Transactions
Which of the following are the three main forms of business ownership?
a) Franchise, Partnership, Corporation
b) Corporation, Sole Proprietorship, Partnership
c) Corporation, Not-for-profit Organization, Sole Proprietorship
d) Sole Proprietorship
b) Corporation, Sole Proprietorship, Partnership
What is the usual length for a fiscal period?
a) One year
b) One week
c) One month
d) One decade
a) One year
How is the fundamental accounting equation commonly stated?
a) Owner's Equity = Assets + Liabilities
b) Assets = Liabilities - Owner's Equity
c) Assets = Liabilities + Owner's Equity
d) Liabilities = Assets + Owner's Equity
c) Assets = Liabilities + Owner's Equity
Which Canadian organization is responsible for setting generally accepted accounting principles?
a) Ontario Securities Commission
b) Public Accountants Council of Canada
c) Canada Customs and Revenue Agency
d) Canadian Institute of Chartered Accountants
d) Canadian Institute of Chartered Accountants
A business has assets of $140,000 and liabilities of $60,000. How much is its owner's equity?
a) $0
b) $80,000
c) $140,000
d) $200,000
b) $80,000
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What does the GAAP principle of "Going Concern Concept" mean?
a) A business will continue to operate indefinitely
b) A business is separate and distinct from its owners
c) The life of a business is divisible into time periods of
equal length
d) A selected accounting method should be applied
period after period.
a) A business will continue to operate indefinitely
Which form of business is itself a legal entity?
a) Corporation
b) Partnership
c) Sole proprietors
d) All forms listed are legal entities
a) Corporation
What is the best meaning for "Accounting"?
a) Making a maximum profit
b) Keeping track of cash and making deposits
c) Recording all the events that occur in a business
d) The classifying, recording, summarizing, and
analyzing of financial information
d) The classifying, recording, summarizing, and
analyzing of financial information
What is another term for Owner's Equity?
a) Profit
b) Capital
c) Net Profit
d) Initial investment
b) Capital
Which stakeholders do not use a company's financial statements in their typical interactions with
the company?
a) Bankers
b) Customers
c) Managers
d) Shareholders
b) Customers
Financial Accounting (FAC1501) – Assessment 1 |
Complete Summary, Exercises, and Solutions for
Accounting Principles and Transactions
Which of the following are the three main forms of business ownership?
a) Franchise, Partnership, Corporation
b) Corporation, Sole Proprietorship, Partnership
c) Corporation, Not-for-profit Organization, Sole Proprietorship
d) Sole Proprietorship
b) Corporation, Sole Proprietorship, Partnership
What is the usual length for a fiscal period?
a) One year
b) One week
c) One month
d) One decade
a) One year
How is the fundamental accounting equation commonly stated?
a) Owner's Equity = Assets + Liabilities
b) Assets = Liabilities - Owner's Equity
c) Assets = Liabilities + Owner's Equity
d) Liabilities = Assets + Owner's Equity
c) Assets = Liabilities + Owner's Equity
Which Canadian organization is responsible for setting generally accepted accounting principles?
a) Ontario Securities Commission
b) Public Accountants Council of Canada
c) Canada Customs and Revenue Agency
d) Canadian Institute of Chartered Accountants
d) Canadian Institute of Chartered Accountants
A business has assets of $140,000 and liabilities of $60,000. How much is its owner's equity?
a) $0
b) $80,000
c) $140,000
d) $200,000
b) $80,000
, 2|Page
What does the GAAP principle of "Going Concern Concept" mean?
a) A business will continue to operate indefinitely
b) A business is separate and distinct from its owners
c) The life of a business is divisible into time periods of
equal length
d) A selected accounting method should be applied
period after period.
a) A business will continue to operate indefinitely
Which form of business is itself a legal entity?
a) Corporation
b) Partnership
c) Sole proprietors
d) All forms listed are legal entities
a) Corporation
What is the best meaning for "Accounting"?
a) Making a maximum profit
b) Keeping track of cash and making deposits
c) Recording all the events that occur in a business
d) The classifying, recording, summarizing, and
analyzing of financial information
d) The classifying, recording, summarizing, and
analyzing of financial information
What is another term for Owner's Equity?
a) Profit
b) Capital
c) Net Profit
d) Initial investment
b) Capital
Which stakeholders do not use a company's financial statements in their typical interactions with
the company?
a) Bankers
b) Customers
c) Managers
d) Shareholders
b) Customers
