HRM732 UPDATED ACTUAL Exam
Questions and CORRECT Answers
All of the following are steps used to analyze ethical dilemmas - CORRECT ANSWER -
a. Using the organization's code of ethics to identify ethical situations
b. Using personal ethics to identify ethical situations
c. Identifying potential stakeholders
Which of the following principles or assumptions requires that the activities of a business be kept
distinct from those of its owner(s)? - CORRECT ANSWER - Economic entity concept
An external user would NOT include - CORRECT ANSWER - an employee
Mel Green is the proprietor (owner) of Green's, a retailer of athletic apparel. When recording the
financial transactions of Green's, Mel does not record an entry for a car he purchased for
personal use. Mel took out a personal loan to pay for the car. What accounting assumption guides
Mel's behaviour - CORRECT ANSWER - economic entity concept
An external user could be a - CORRECT ANSWER - Canadian Revenue Agency
The going concern assumption - CORRECT ANSWER - Assumes the company will
continue to operate in the foreseeable future
The main objective of the financial statement is - CORRECT ANSWER - To provide
useful information to investors and creditors to make decisions about a business
The Internal Accounting Standards Board - CORRECT ANSWER - Word to reduce
differences in accounting practices across countries
,Which of the following would violate the economic entity concept? - CORRECT
ANSWER - Reporting the owner's personal sailboat as an asset on the balance sheet
Canadian Accounting Standards allow a choice of whether or not to use International Financial
Reporting Standards for which type of company? - CORRECT ANSWER - All private
companies in Canada
A trial balances - CORRECT ANSWER - A list of accounts and their balances at a given
time
The common characteristic possessed by all assets is - CORRECT ANSWER - Future
economic benefit
The accounting equation for a proprietorship may be expressed as - CORRECT
ANSWER - Asset = Liabilities + Owner's Equity
In the first month of operations, the total of the debit entries to the cash account amounted to
$900 and the total credit entries to the cash account amounted to $500. The cash account has a -
CORRECT ANSWER - $400 debit balance
Collection of a $600 accounts receivable - CORRECT ANSWER - Increase an asset $600;
decreases an asset $600
Jackson's Small Engine Repair shop, a proprietorship, started the year with total assets of
$60,000 and total liabilities of $40,000. During the year, the business recorded $100,000 in repair
revenues, $55,000 in expenses, and Mike Jackson, the owner, withdrew $10,000. Jackson's
capital balance at the end of the year was - CORRECT ANSWER - $55,000
If an owner makes a withdrawal of cash from a proprietorship then - CORRECT
ANSWER - a. Assets will decrease and the owner's equity will decrease
,In recording an accounting transaction in a double-entry systems - CORRECT ANSWER -
The amount of the debits must equal the amount of the credits
In the second month of operations, the total of the debit entries to the cash account amounted to
$900 and the total of the credit entries to the cash account amounted to $500. The opening
balance of the cash accounts was $200. The cash account has a - CORRECT ANSWER -
$600 debit balance
If a company reported a loss in the first month of operations, the loss would reduce the owner's
capital and would be? - CORRECT ANSWER - Deducted in the same section as owner's
drawings
The fundamental difference between managerial and financial accounting is that - CORRECT
ANSWER - Managerial accounting provides information for decision-makers within the
organization, whereas financial accounting provides information for individuals and institutions
external to the organization
Which one of the following is true as it relates to the management function of control? -
CORRECT ANSWER - It is achieved by evaluating the performance of managers and the
operations for which they are responsible
Financial accounting stresses accounting concepts and procedures that are relevant to preparing
that are relevant to preparing reports of internal uses of accounting information. True or false? -
CORRECT ANSWER - False
Which of the following is the last step in the planning and control process? - CORRECT
ANSWER - make decisions basefd on the evaulatin of the results
Managerial accounting stresses accounting concepts and procedures that are relevant to
preparing report for - CORRECT ANSWER - Internal users of accounting information
Performance reports often compare current performance with - CORRECT ANSWER -
Performance in prior period or budgeted performance
, The goal of managerial accounting is to provide information that managers need for - CORRECT
ANSWER - Planning, control, and decision making
Focuses on future performance - CORRECT ANSWER - Managerial accounting
A good code of ethics eliminates potential unethical behaviour. True or false? - CORRECT
ANSWER - False
Budgets can be used to communicate a company's goals to employees. True or false? -
CORRECT ANSWER - true
service department costs are allocated to producing departments - CORRECT ANSWER -
so that the costs can be allocated to the products in the producing departments
which of the following is a method that is used to estimate variable and fixed costs? - CORRECT
ANSWER - Account analysis, high-low method, regression analysis
Which of the following is most likely to be a variable cost? - CORRECT ANSWER -
Direct labour
When service department costs are allocated using actual costs and actual usage, the amount
allocated to one department will depend on the usage of other departments. True or false? -
CORRECT ANSWER - true
An allocation base - CORRECT ANSWER - Relates the cost pool to the cost objectives
At the break-even point, total revenue equals total fixed costs. True or false? - CORRECT
ANSWER - false
Questions and CORRECT Answers
All of the following are steps used to analyze ethical dilemmas - CORRECT ANSWER -
a. Using the organization's code of ethics to identify ethical situations
b. Using personal ethics to identify ethical situations
c. Identifying potential stakeholders
Which of the following principles or assumptions requires that the activities of a business be kept
distinct from those of its owner(s)? - CORRECT ANSWER - Economic entity concept
An external user would NOT include - CORRECT ANSWER - an employee
Mel Green is the proprietor (owner) of Green's, a retailer of athletic apparel. When recording the
financial transactions of Green's, Mel does not record an entry for a car he purchased for
personal use. Mel took out a personal loan to pay for the car. What accounting assumption guides
Mel's behaviour - CORRECT ANSWER - economic entity concept
An external user could be a - CORRECT ANSWER - Canadian Revenue Agency
The going concern assumption - CORRECT ANSWER - Assumes the company will
continue to operate in the foreseeable future
The main objective of the financial statement is - CORRECT ANSWER - To provide
useful information to investors and creditors to make decisions about a business
The Internal Accounting Standards Board - CORRECT ANSWER - Word to reduce
differences in accounting practices across countries
,Which of the following would violate the economic entity concept? - CORRECT
ANSWER - Reporting the owner's personal sailboat as an asset on the balance sheet
Canadian Accounting Standards allow a choice of whether or not to use International Financial
Reporting Standards for which type of company? - CORRECT ANSWER - All private
companies in Canada
A trial balances - CORRECT ANSWER - A list of accounts and their balances at a given
time
The common characteristic possessed by all assets is - CORRECT ANSWER - Future
economic benefit
The accounting equation for a proprietorship may be expressed as - CORRECT
ANSWER - Asset = Liabilities + Owner's Equity
In the first month of operations, the total of the debit entries to the cash account amounted to
$900 and the total credit entries to the cash account amounted to $500. The cash account has a -
CORRECT ANSWER - $400 debit balance
Collection of a $600 accounts receivable - CORRECT ANSWER - Increase an asset $600;
decreases an asset $600
Jackson's Small Engine Repair shop, a proprietorship, started the year with total assets of
$60,000 and total liabilities of $40,000. During the year, the business recorded $100,000 in repair
revenues, $55,000 in expenses, and Mike Jackson, the owner, withdrew $10,000. Jackson's
capital balance at the end of the year was - CORRECT ANSWER - $55,000
If an owner makes a withdrawal of cash from a proprietorship then - CORRECT
ANSWER - a. Assets will decrease and the owner's equity will decrease
,In recording an accounting transaction in a double-entry systems - CORRECT ANSWER -
The amount of the debits must equal the amount of the credits
In the second month of operations, the total of the debit entries to the cash account amounted to
$900 and the total of the credit entries to the cash account amounted to $500. The opening
balance of the cash accounts was $200. The cash account has a - CORRECT ANSWER -
$600 debit balance
If a company reported a loss in the first month of operations, the loss would reduce the owner's
capital and would be? - CORRECT ANSWER - Deducted in the same section as owner's
drawings
The fundamental difference between managerial and financial accounting is that - CORRECT
ANSWER - Managerial accounting provides information for decision-makers within the
organization, whereas financial accounting provides information for individuals and institutions
external to the organization
Which one of the following is true as it relates to the management function of control? -
CORRECT ANSWER - It is achieved by evaluating the performance of managers and the
operations for which they are responsible
Financial accounting stresses accounting concepts and procedures that are relevant to preparing
that are relevant to preparing reports of internal uses of accounting information. True or false? -
CORRECT ANSWER - False
Which of the following is the last step in the planning and control process? - CORRECT
ANSWER - make decisions basefd on the evaulatin of the results
Managerial accounting stresses accounting concepts and procedures that are relevant to
preparing report for - CORRECT ANSWER - Internal users of accounting information
Performance reports often compare current performance with - CORRECT ANSWER -
Performance in prior period or budgeted performance
, The goal of managerial accounting is to provide information that managers need for - CORRECT
ANSWER - Planning, control, and decision making
Focuses on future performance - CORRECT ANSWER - Managerial accounting
A good code of ethics eliminates potential unethical behaviour. True or false? - CORRECT
ANSWER - False
Budgets can be used to communicate a company's goals to employees. True or false? -
CORRECT ANSWER - true
service department costs are allocated to producing departments - CORRECT ANSWER -
so that the costs can be allocated to the products in the producing departments
which of the following is a method that is used to estimate variable and fixed costs? - CORRECT
ANSWER - Account analysis, high-low method, regression analysis
Which of the following is most likely to be a variable cost? - CORRECT ANSWER -
Direct labour
When service department costs are allocated using actual costs and actual usage, the amount
allocated to one department will depend on the usage of other departments. True or false? -
CORRECT ANSWER - true
An allocation base - CORRECT ANSWER - Relates the cost pool to the cost objectives
At the break-even point, total revenue equals total fixed costs. True or false? - CORRECT
ANSWER - false
