Test bank for:
FOR FINANCIAL ACCOUNTING, FIFTH CANADIAN EDITION
(5TH EDITION) BY WALTER T. HARRISON JR.
GRADED A+
,CHAPTER 1 THE FINANCIAL STATEMENTS
1.1 Explain Why Accounting Is The Language Of Business
1) Which Of The Following Persons Or Groups Have The Ultimate Control Of A Corporation?
1. A) The Chief Executive Officer
2. B) The Board Of Directors
3. C) The Audit Committee
4. D) The Shareholders
Answer: D
Diff: 2 Type: Mc
L.O.: L.O. 1-1
2) Financial Statements Are:
1. A) Reports Issued By Outside Consultants Who Are Hired To Analyze Key Operations
Of The Business
2. B) Reports Created By Management That States It Is Responsible For The Acts Of The
Corporation
3. C) Standard Documents That Tell Us How Well A Business Is Performing And Where It
Stands In Financial Terms
4. D) Standard Documents Issued By Outside Consultants Who Are Hired To Analyze
Key Operations Of The Business In Financial Terms
Answer: C
Diff: 1 Type: Mc
L.O.: L.O. 1-1
3) The Accounting Equation Can Be Stated As:
1. A) Assets + Liabilities = Shareholders’ Equity
2. B) Assets = Liabilities + Shareholders’ Equity
3. C) Assets = Liabilities – Shareholders’ Equity
4. D) Assets + Shareholders’ Equity = Liabilities
Answer: B
,Diff: 1 Type: Mc
L.O.: L.O. 1-1
4) The Owners’ Interest In The Assets Of A Corporation Is Known As:
1. A) Assets
2. B) Shareholders’ Equity
3. C) Expenses
4. D) Revenues
Answer: B
Diff: 1 Type: Mc
L.O.: L.O. 1-1
5) On January 1, 2014, Total Assets For Liftoff Technologies Were $125,000; On December 31,
2014, Total Assets Were $145,000. On January 1, 2014, Total Liabilities Were $110,000; On
December 31, 2014, Total Liabilities Were $115,000. What Are The Amount Of The Change And
The Direction Of The Change In Liftoff Technologies Shareholders’ Equity For 2014?
1. A) Decrease Of $15,000
2. B) Increase Of $15,000
3. C) Increase Of $30,000
4. D) Decrease Of $30,000
Answer: B
Diff: 2 Type: Mc
L.O.: L.O. 1-1
6) Claims Held By The Shareholders (Owners) Of A Corporation Are Referred To As:
1. A) Retained Earnings
2. B) Share Capital
3. C) Share Capital Minus Retained Earnings
4. D) Share Capital Plus Retained Earnings
Answer: D
Diff: 3 Type: Mc
L.O.: L.O. 1-1
7) Payables Are Classified As:
1. A) Increases In Earnings
2. B) Assets
, 3. C) Decreases In Earnings
4. D) Liabilities
Answer: D
Diff: 1 Type: Mc
L.O.: L.O. 1-1
8) Receivables Are Classified As:
1. A) Increases In Earnings
2. B) Assets
3. C) Decreases In Earnings
4. D) Liabilities
Answer: B
Diff: 1 Type: Mc
L.O.: L.O. 1-1
9) Revenues Are:
1. A) Increases In Liabilities Resulting From Delivering Goods Or Services To Customers
2. B) Increases In Retained Earnings Resulting From Delivering Goods Or Services To
Customers
3. C) Decreases In Assets Resulting From Delivering Goods Or Services To Customers
4. D) Decreases In Retained Earnings Resulting From Delivering Goods Or Services To
Customers
Answer: B
Diff: 2 Type: Mc
L.O.: L.O. 1-1
10) If Assets Increase $120,000 During A Given Period And Liabilities Decrease $25,000 During
The Same Period, Shareholders’ Equity Must:
1. A) Increase $95,000
2. B) Decrease $145,000
3. C) Decrease $95,000
4. D) Increase $145,000
Answer: D
Diff: 3 Type: Mc
L.O.: L.O. 1-1
FOR FINANCIAL ACCOUNTING, FIFTH CANADIAN EDITION
(5TH EDITION) BY WALTER T. HARRISON JR.
GRADED A+
,CHAPTER 1 THE FINANCIAL STATEMENTS
1.1 Explain Why Accounting Is The Language Of Business
1) Which Of The Following Persons Or Groups Have The Ultimate Control Of A Corporation?
1. A) The Chief Executive Officer
2. B) The Board Of Directors
3. C) The Audit Committee
4. D) The Shareholders
Answer: D
Diff: 2 Type: Mc
L.O.: L.O. 1-1
2) Financial Statements Are:
1. A) Reports Issued By Outside Consultants Who Are Hired To Analyze Key Operations
Of The Business
2. B) Reports Created By Management That States It Is Responsible For The Acts Of The
Corporation
3. C) Standard Documents That Tell Us How Well A Business Is Performing And Where It
Stands In Financial Terms
4. D) Standard Documents Issued By Outside Consultants Who Are Hired To Analyze
Key Operations Of The Business In Financial Terms
Answer: C
Diff: 1 Type: Mc
L.O.: L.O. 1-1
3) The Accounting Equation Can Be Stated As:
1. A) Assets + Liabilities = Shareholders’ Equity
2. B) Assets = Liabilities + Shareholders’ Equity
3. C) Assets = Liabilities – Shareholders’ Equity
4. D) Assets + Shareholders’ Equity = Liabilities
Answer: B
,Diff: 1 Type: Mc
L.O.: L.O. 1-1
4) The Owners’ Interest In The Assets Of A Corporation Is Known As:
1. A) Assets
2. B) Shareholders’ Equity
3. C) Expenses
4. D) Revenues
Answer: B
Diff: 1 Type: Mc
L.O.: L.O. 1-1
5) On January 1, 2014, Total Assets For Liftoff Technologies Were $125,000; On December 31,
2014, Total Assets Were $145,000. On January 1, 2014, Total Liabilities Were $110,000; On
December 31, 2014, Total Liabilities Were $115,000. What Are The Amount Of The Change And
The Direction Of The Change In Liftoff Technologies Shareholders’ Equity For 2014?
1. A) Decrease Of $15,000
2. B) Increase Of $15,000
3. C) Increase Of $30,000
4. D) Decrease Of $30,000
Answer: B
Diff: 2 Type: Mc
L.O.: L.O. 1-1
6) Claims Held By The Shareholders (Owners) Of A Corporation Are Referred To As:
1. A) Retained Earnings
2. B) Share Capital
3. C) Share Capital Minus Retained Earnings
4. D) Share Capital Plus Retained Earnings
Answer: D
Diff: 3 Type: Mc
L.O.: L.O. 1-1
7) Payables Are Classified As:
1. A) Increases In Earnings
2. B) Assets
, 3. C) Decreases In Earnings
4. D) Liabilities
Answer: D
Diff: 1 Type: Mc
L.O.: L.O. 1-1
8) Receivables Are Classified As:
1. A) Increases In Earnings
2. B) Assets
3. C) Decreases In Earnings
4. D) Liabilities
Answer: B
Diff: 1 Type: Mc
L.O.: L.O. 1-1
9) Revenues Are:
1. A) Increases In Liabilities Resulting From Delivering Goods Or Services To Customers
2. B) Increases In Retained Earnings Resulting From Delivering Goods Or Services To
Customers
3. C) Decreases In Assets Resulting From Delivering Goods Or Services To Customers
4. D) Decreases In Retained Earnings Resulting From Delivering Goods Or Services To
Customers
Answer: B
Diff: 2 Type: Mc
L.O.: L.O. 1-1
10) If Assets Increase $120,000 During A Given Period And Liabilities Decrease $25,000 During
The Same Period, Shareholders’ Equity Must:
1. A) Increase $95,000
2. B) Decrease $145,000
3. C) Decrease $95,000
4. D) Increase $145,000
Answer: D
Diff: 3 Type: Mc
L.O.: L.O. 1-1
