Test Bank for Financial Accounting, 8th Canadian Edition by Robert Libby.pdf

,ACCESS Test Bank for Financial Accounting 8th Canadian Edition Libby
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Financial Accounting Edition 8 by Libby
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CORRECT ANSWERS ARE LOCATED IN THE 2ND HALF OF THIS DOC.
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TRUE/FALSE c-cWritec'T'cif cthecstatementcisctruecandc'F'cif cthecstatementciscfalse.
1) Accountingciscacsystemcthat ccollectscand cprocessescfinancialcinformationcabout canco
rganizationcand creportscthat cinformationctocdecisioncmakers.
⊚c true
⊚c false

2) Externalcuserscof caccountingcinformationcincludecthecmanagerscwhocplan,corganize,cand cruncacb
usiness.
⊚c true
⊚c false

3) Incaccountingcand creportingcforcacbusinesscentity,cthecaccountingcand creportingcforcthecb
usinesscmust cbeckept cseparatecfromcotherceconomiccaffairscof citscowners.
⊚c true
⊚c false

4) Accountingccommunicatescfinancialcinformationcabout cacbusinessctocbothcinternalcand ce
xternalcusers.
⊚c true
⊚c false

5) A cstatement cof cfinancialcpositioncshould cbecdatedcforcacperiod c(suchcasc"Forcthecyearcended cD
ecemberc31,c20X1"),cwhereascacstatement cof cearningscshould cbecdated cat cacpoint cinctimec(suc
hcasc"At cDecemberc31,c20X1").
⊚c true
⊚c false

6) Expensescarectheccost cof cassetscconsumed corcservicescused cincthecprocesscof cgeneratingcre
venue.
⊚c true
⊚c false

7) Generallycspeaking,cacfinanciallycsuccessfulcbusinesscwillchavecpositiveccashcflowscfromco
peratingcactivities.
⊚c true
⊚c false




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,ACCESS Test Bank for Financial Accounting 8th Canadian Edition Libby
c c c c c c c c c




Financial Accounting Edition 8 by Libby
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8) Thecissuancecof cadditionalccommoncsharesciscacfinancingcactivitycthat cgeneratescpositiveccashcfl
owctocthecfirm.
⊚c true
⊚c false

9) Borrowingcmoneycand cissuingcsharescarecexamplescof cfinancingcactivities
⊚c true
⊚c false

10) Totalcassetscarec$60,000,ctotalcliabilities,c$30,000,cand cshareccapitalcisc$20,000;ctherefore,cre
tained cearningscisc$5,000.
⊚c true
⊚c false

11) Investingcactivitiescinvolveccollectingcthecnecessarycfundsctocoperatecthecbusiness.
⊚c true
⊚c false

12) Thecpurchasecof cequipment ciscancexamplecof cacfinancingcactivity.
⊚c true
⊚c false

13) Thecreasonscforcacdecreasecinccashccancbecdetermined cbycexaminingcthecstatement cof cearnings.
⊚c true
⊚c false

14) Economiccresourcescthat carecowned cbycacbusinesscareccalled cshareholders'cequity.
⊚c true
⊚c false

15) Thecaccountingcmodelcforcthecstatement cof cfinancialcpositioncis:cAssetsc+cLiabilitiesc-
Shareholders'cEquity.
c

⊚c true
⊚c false

16) Assetscarecresourcescowned cbycacbusinesscthat cprovideccurrent cservicescorcbenefitsctocthecb
usiness.
⊚c true
⊚c false




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, ACCESS Test Bank for Financial Accounting 8th Canadian Edition Libby
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Financial Accounting Edition 8 by Libby
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17) Profit ciscthecexcesscof ctotalcrevenuescoverctotalcexpensescincurred ctocgeneratecrevenuecduringcac
specificcperiod.
⊚c true
⊚c false

18) Thecfinancialcstatementscprepared cbycaccorporationcincludecacstatement cof cfinancialcposition,cst
atement cof cearnings,cstatement cof ccashcflows,cand cstatement cof cmoney.
⊚c true
⊚c false

19) A cbankercwhociscconsideringcmakingcacloanctocaccorporationcwould cbeconecof cthecco
rporation'scinternalcdecisioncmakers.
⊚c true
⊚c false

20) Assetscarececonomiccresourcesccontrolled cbycthecentitycascacresult cof cpast ctransactionscorce
ventscand cfromcwhichcfuturececonomiccbenefitsccancbecobtained.
⊚c true
⊚c false

21) Thecfinancialcstatement cthat cshowscancentity'sceconomiccresourcescand citscliabilitiesciscthecst
atement cof cretained cearnings.
⊚c true
⊚c false

22) Thecstatement cof ccomprehensivecincomecreportscthecchangecincshareholders'cequitycduringcacp
eriod cfromcbusinesscactivitiescothercthancinvestmentscbycshareholderscorcdistributionsctocshare
holders.
⊚c true
⊚c false

23) A cnotecpayableciscacborrowingcinstrument cthat cgenerallycdoescnot cinvolvecthecpayment cof cin
terest.
⊚c true
⊚c false

24) If caccorporationcdoescnot cpaycitscobligationscwhenctheycarecdue,citsccreditorscmaycbecablectocfo
rcecthecsalecof cthecbusiness'scassetsctocpayctheircclaims.
⊚c true
⊚c false




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