, TESTBANK FOR Accounting Essentials for Canada Weinstein
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All available appendices and Excel files (if included in the original resources) are
provided.
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editions.
New editions are added regularly – stay connected for updates!
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chapter.
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,Test Bank
Chapter 1
Evaluating Transactions
Name: _______________________________________
Class: _______________________________________
Date: _______________________________________
Accounting and Bookkeeping Defined
1. The most fundamental accounting concept to learn is the accounting equation.
A. True
B. False
2. Items in a business that represent value are called assets.
A. True
B. False
3. A sole proprietorship type of business is the easiest to form and offers limited liability.
A. True
B. False
4. If assets are $15,000 and liabilities are $5,000, then owner’s equity equals $10,000.
A. True
B. False
5. The primary drawback of the corporation is double taxation.
A. True
B. False
6. Devlin has been a bookkeeper for more than twenty years and appreciates the importance of
acting in accordance with professional standards and all applicable laws. What key quality of a
bookkeeper is Devlin displaying?
A. Confidentiality
B. Security
C. Integrity
D. None of these options
7. Which of these is equivalent to the accounting equation?
A. Assets = Liabilities – Owner’s Equity
B. Assets – Liabilities = Owner’s Equity
C. Assets + Liabilities = Owner’s Equity
D. Assets + Owner’s Equity = Liabilities
Accounting Essentials for Canada Page 1 of 4
,Test Bank
8. If Priya, owner of Gymnastics Oasis, invested $20,000 in her business and Gymnastics Oasis owes
$8,000 to outside entities, what is the amount of the business’s assets?
A. $28,000
B. $12,000
C. $20,000
D. $8,000
9. Match each term to its best description.
Assets A. Portion of assets owed to entities outside the
Liabilities business
Owner’s equity B. Portion of assets not owed to entities outside
Accounting equation the business
C. The most fundamental accounting concept
D. Refers to items of value within the business
10. Match each business type to its corresponding characteristic.
Sole proprietorship A. Owned by two or more individuals
Corporation B. Offers limited liability to its owners
Partnership C. The easiest type of business to form
11. Identify each characteristic as being associated with a sole proprietorship (SP), partnership (P) or
corporation (C).
SP P C
A. Decisions agreed upon by multiple owners
B. The simplest form of business to start
C. Owner relies solely on personal experience to run
the business
D. Each owner has limited liability
E. The business is subject to double taxation
F. Multiple owners bring individual expertise to the
business
12. In what order do the elements of the accounting equation appear?
Owner’s equity
Assets
Liabilities
Account Names and Descriptions
13. Capital represents the owner’s investment/equity in a business.
A. True
B. False
Accounting Essentials for Canada Page 2 of 4
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14. Revenue and expenses cause owner’s equity to increase.
A. True
B. False
15. Which of these is NOT an owner’s equity account?
A. Revenue
B. Equipment
C. Expenses
D. Drawing
16. Unearned revenue is considered what type of account?
A. Liability
B. Asset
C. Owner capital
D. Owner’s equity
17. Deliveries Incorporated repurchased $8,000 of its own common stock. What account is
associated with this $8,000 amount?
A. Additional Paid in Capital
B. Preferred Stock
C. Treasury Stock
D. Retained Earnings
18. Match each example account to its appropriate account type.
Assets A. Cash account
Liabilities B. Salaries Payable account
Owner’s equity C. Utilities Expense account
19. Classify each account as an asset, liability or owner’s equity (OE) account.
Asset Liability OE
A. John Doe, Drawing
B. Buildings
C. Utilities Expense
D. Accounts Payable
E. Accounts Receivable
F. Mortgage Payable
Evaluating Transactions
20. Every transaction is recorded in terms of an increase and/or decrease in two or more accounts.
A. True
B. False
Accounting Essentials for Canada Page 3 of 4
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21. Match the steps in evaluating transactions to their corresponding activities.
Step 1 A. Determine by how much each account is impacted.
Step 2 B. Determine which accounts are impacted.
Step 3 C. Determine whether each account balance increases or
decreases.
22. The following steps relate to the evaluation of a transaction. Place them in the correct order.
Determine whether the balance in each account has increased or decreased.
Determine by how much each account has been impacted.
Determine which accounts have been impacted.
Recording Transactions
23. Kamala Chen, owner of Timepiece Masters, withdraws $2,000 from the business to pay personal
expenses. What two accounts are impacted?
A. Accounts Payable and Kamala Chen, Drawing
B. Cash and Kamala Chen, Drawing
C. Accounts Payable and Miscellaneous Expenses
D. Cash and Miscellaneous Expenses
24. Archaeology Contractors purchased supplies for cash. What’s the impact of this transaction?
A. Increase to Supplies, increase to Cash
B. Increase to Owner’s Equity, increase to Supplies
C. Decrease to Cash, increase to Supplies
D. Decrease to Cash, increase to Owner’s Equity
25. Match each transaction to the impact it has.
Bought supplies for cash A. Assets increase, owner’s equity
Received a utility bill to be paid later increases
Purchased equipment on account B. Assets decrease, assets increase
Owner invested funds into the C. Liabilities increase, assets increase
business D. Liabilities decrease, assets decrease
Business made a payment on account E. Owner’s equity decreases, liabilities
increase
Accounting Essentials for Canada Page 4 of 4
,Test Bank
Chapter 2
The Accounting Cycle
Name: _______________________________________
Class: _______________________________________
Date: _______________________________________
Step 1: Analyze Business Transactions
1. A cheque written to a supplier is an example of a source document.
A. True
B. False
2. What CANNOT be a source document for a business?
A. A cheque from a customer
B. An invoice sent to a customer
C. A balance sheet
D. A bank statement
3. Which statement regarding a sales order is inaccurate?
A. It‘s an internal document that’s never provided to the purchasing company.
B. It’s prepared by the seller.
C. It’s used by the billing department.
D. It’s used to complete shipment of the goods sold.
4. How is a recurring entry recorded?
A. Multiple times, in a different manner each time
B. Only once
C. Multiple times in the same manner
D. None of these options
5. What is the first step in the accounting cycle?
A. Post journal entries.
B. Prepare financial statements.
C. Analyze business transactions.
D. Prepare the unadjusted trial balance.
Accounting Essentials for Canada Page 1 of 5
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6. Match each term to its best description.
Cheque A. Report outlining business activities for a given
Source document month
Invoice B. Document with information on a payment received
Bank statement or made
C. Any document with information on one or more
transactions
D. A bill for goods or services
Step 2: Record Journal Entries
7. The cost principle states that a business may record the current market price if it’s greater than
the amount listed on an invoice.
A. True
B. False
8. The matching principle states that expenses must be matched with their appropriate source
document.
A. True
B. False
9. Identify the item that is NOT a generally accepted accounting principle?
A. Revenue principle
B. Expense spending principle
C. Matching principle
D. Time-period principle
Step 3: Post Journal Entries
10. Match each GAAP principle to its best description.
Cost principle A. The amount recorded in the financial records
Matching principle reflects the cost paid.
Time-period principle B. A public company must report all pertinent
Revenue principle information about company activities.
Monetary unit principle C. Accounting activity must be reported over
Full disclosure principle specific periods.
D. Expenses must be recorded in the same time
period as the revenue they generate.
E. Revenue is recorded when earned, regardless of
when cash exchanges hands.
F. Express amounts in a consistent currency (CDN
dollars).
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Step 4: Unadjusted Trial Balance
11. After all postings are completed and prior to the recording of adjusting entries, an unadjusted
trial balance is prepared.
A. True
B. False
Step 5: Adjusting Entries and Adjusted Trial Balance
12. When is revenue recognized under the accrual basis of accounting?
A. When cash is received
B. When services are rendered
C. When a contract is signed
D. None of these options
13. Match each term to its explanation.
Unadjusted trial balance A. Expenses are recorded when incurred
Accrual basis of accounting B. Summarizes account balances in one
Cash basis of accounting location
C. Revenue is recorded when cash is received
Step 6: Financial Statements
14. Net income is reported on both the income statement and statement of owner’s equity.
A. True
B. False
15. The statement of owner’s equity displays all assets, liabilities and owner’s equity.
A. True
B. False
16. Which of these is NOT a financial statement?
A. Bank statement
B. Income statement
C. Balance sheet
D. Statement of cash flows
Accounting Essentials for Canada Page 3 of 5
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17. Match each financial statement to its best description.
Income statement A. Reports net income and owner drawing
Statement of owner’s equity B. Reports revenue, expenses and net income
Balance sheet C. Illustrates that assets = liabilities + owner’s
Statement of cash flows equity
D. Summarizes activities leading to a
company’s ending cash balance
18. Classify each item as a source document, a rule dictated within GAAP, or a financial statement.
Source Doc GAAP Rule Statement
A. Balance sheet
B. Invoice
C. Matching principle
D. Time-period principle
E. Statement of owner’s equity
F. Bank statement
Step 7: Closing Entries and the Post-Closing Trial Balance
19. Permanent accounts are closed and transferred to the owner’s capital account.
A. True
B. False
20. Rent Expense and Owner’s Drawing are examples of temporary accounts.
A. True
B. False
21. Which of these is a permanent account?
A. Rent Expense
B. Owner’s Drawing
C. Unearned Revenue
D. Rent Revenue
22. Match each item related to closing a company’s books to its best description.
Temporary accounts A. Revenue, expenses and drawing
Permanent accounts B. Report created in the last step in the
Post-closing trial balance accounting cycle
Closing process C. The act of resetting certain accounts to zero
D. Accounts that remain after the closing
process ends
Accounting Essentials for Canada Page 4 of 5
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
⚠️Note on Answer Keys: If the answer key is not included within the chapter
questions, you will find the complete answers and solutions at the end of each
chapter.
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
,Test Bank
Chapter 1
Evaluating Transactions
Name: _______________________________________
Class: _______________________________________
Date: _______________________________________
Accounting and Bookkeeping Defined
1. The most fundamental accounting concept to learn is the accounting equation.
A. True
B. False
2. Items in a business that represent value are called assets.
A. True
B. False
3. A sole proprietorship type of business is the easiest to form and offers limited liability.
A. True
B. False
4. If assets are $15,000 and liabilities are $5,000, then owner’s equity equals $10,000.
A. True
B. False
5. The primary drawback of the corporation is double taxation.
A. True
B. False
6. Devlin has been a bookkeeper for more than twenty years and appreciates the importance of
acting in accordance with professional standards and all applicable laws. What key quality of a
bookkeeper is Devlin displaying?
A. Confidentiality
B. Security
C. Integrity
D. None of these options
7. Which of these is equivalent to the accounting equation?
A. Assets = Liabilities – Owner’s Equity
B. Assets – Liabilities = Owner’s Equity
C. Assets + Liabilities = Owner’s Equity
D. Assets + Owner’s Equity = Liabilities
Accounting Essentials for Canada Page 1 of 4
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8. If Priya, owner of Gymnastics Oasis, invested $20,000 in her business and Gymnastics Oasis owes
$8,000 to outside entities, what is the amount of the business’s assets?
A. $28,000
B. $12,000
C. $20,000
D. $8,000
9. Match each term to its best description.
Assets A. Portion of assets owed to entities outside the
Liabilities business
Owner’s equity B. Portion of assets not owed to entities outside
Accounting equation the business
C. The most fundamental accounting concept
D. Refers to items of value within the business
10. Match each business type to its corresponding characteristic.
Sole proprietorship A. Owned by two or more individuals
Corporation B. Offers limited liability to its owners
Partnership C. The easiest type of business to form
11. Identify each characteristic as being associated with a sole proprietorship (SP), partnership (P) or
corporation (C).
SP P C
A. Decisions agreed upon by multiple owners
B. The simplest form of business to start
C. Owner relies solely on personal experience to run
the business
D. Each owner has limited liability
E. The business is subject to double taxation
F. Multiple owners bring individual expertise to the
business
12. In what order do the elements of the accounting equation appear?
Owner’s equity
Assets
Liabilities
Account Names and Descriptions
13. Capital represents the owner’s investment/equity in a business.
A. True
B. False
Accounting Essentials for Canada Page 2 of 4
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14. Revenue and expenses cause owner’s equity to increase.
A. True
B. False
15. Which of these is NOT an owner’s equity account?
A. Revenue
B. Equipment
C. Expenses
D. Drawing
16. Unearned revenue is considered what type of account?
A. Liability
B. Asset
C. Owner capital
D. Owner’s equity
17. Deliveries Incorporated repurchased $8,000 of its own common stock. What account is
associated with this $8,000 amount?
A. Additional Paid in Capital
B. Preferred Stock
C. Treasury Stock
D. Retained Earnings
18. Match each example account to its appropriate account type.
Assets A. Cash account
Liabilities B. Salaries Payable account
Owner’s equity C. Utilities Expense account
19. Classify each account as an asset, liability or owner’s equity (OE) account.
Asset Liability OE
A. John Doe, Drawing
B. Buildings
C. Utilities Expense
D. Accounts Payable
E. Accounts Receivable
F. Mortgage Payable
Evaluating Transactions
20. Every transaction is recorded in terms of an increase and/or decrease in two or more accounts.
A. True
B. False
Accounting Essentials for Canada Page 3 of 4
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21. Match the steps in evaluating transactions to their corresponding activities.
Step 1 A. Determine by how much each account is impacted.
Step 2 B. Determine which accounts are impacted.
Step 3 C. Determine whether each account balance increases or
decreases.
22. The following steps relate to the evaluation of a transaction. Place them in the correct order.
Determine whether the balance in each account has increased or decreased.
Determine by how much each account has been impacted.
Determine which accounts have been impacted.
Recording Transactions
23. Kamala Chen, owner of Timepiece Masters, withdraws $2,000 from the business to pay personal
expenses. What two accounts are impacted?
A. Accounts Payable and Kamala Chen, Drawing
B. Cash and Kamala Chen, Drawing
C. Accounts Payable and Miscellaneous Expenses
D. Cash and Miscellaneous Expenses
24. Archaeology Contractors purchased supplies for cash. What’s the impact of this transaction?
A. Increase to Supplies, increase to Cash
B. Increase to Owner’s Equity, increase to Supplies
C. Decrease to Cash, increase to Supplies
D. Decrease to Cash, increase to Owner’s Equity
25. Match each transaction to the impact it has.
Bought supplies for cash A. Assets increase, owner’s equity
Received a utility bill to be paid later increases
Purchased equipment on account B. Assets decrease, assets increase
Owner invested funds into the C. Liabilities increase, assets increase
business D. Liabilities decrease, assets decrease
Business made a payment on account E. Owner’s equity decreases, liabilities
increase
Accounting Essentials for Canada Page 4 of 4
,Test Bank
Chapter 2
The Accounting Cycle
Name: _______________________________________
Class: _______________________________________
Date: _______________________________________
Step 1: Analyze Business Transactions
1. A cheque written to a supplier is an example of a source document.
A. True
B. False
2. What CANNOT be a source document for a business?
A. A cheque from a customer
B. An invoice sent to a customer
C. A balance sheet
D. A bank statement
3. Which statement regarding a sales order is inaccurate?
A. It‘s an internal document that’s never provided to the purchasing company.
B. It’s prepared by the seller.
C. It’s used by the billing department.
D. It’s used to complete shipment of the goods sold.
4. How is a recurring entry recorded?
A. Multiple times, in a different manner each time
B. Only once
C. Multiple times in the same manner
D. None of these options
5. What is the first step in the accounting cycle?
A. Post journal entries.
B. Prepare financial statements.
C. Analyze business transactions.
D. Prepare the unadjusted trial balance.
Accounting Essentials for Canada Page 1 of 5
,Test Bank
6. Match each term to its best description.
Cheque A. Report outlining business activities for a given
Source document month
Invoice B. Document with information on a payment received
Bank statement or made
C. Any document with information on one or more
transactions
D. A bill for goods or services
Step 2: Record Journal Entries
7. The cost principle states that a business may record the current market price if it’s greater than
the amount listed on an invoice.
A. True
B. False
8. The matching principle states that expenses must be matched with their appropriate source
document.
A. True
B. False
9. Identify the item that is NOT a generally accepted accounting principle?
A. Revenue principle
B. Expense spending principle
C. Matching principle
D. Time-period principle
Step 3: Post Journal Entries
10. Match each GAAP principle to its best description.
Cost principle A. The amount recorded in the financial records
Matching principle reflects the cost paid.
Time-period principle B. A public company must report all pertinent
Revenue principle information about company activities.
Monetary unit principle C. Accounting activity must be reported over
Full disclosure principle specific periods.
D. Expenses must be recorded in the same time
period as the revenue they generate.
E. Revenue is recorded when earned, regardless of
when cash exchanges hands.
F. Express amounts in a consistent currency (CDN
dollars).
Accounting Essentials for Canada Page 2 of 5
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Step 4: Unadjusted Trial Balance
11. After all postings are completed and prior to the recording of adjusting entries, an unadjusted
trial balance is prepared.
A. True
B. False
Step 5: Adjusting Entries and Adjusted Trial Balance
12. When is revenue recognized under the accrual basis of accounting?
A. When cash is received
B. When services are rendered
C. When a contract is signed
D. None of these options
13. Match each term to its explanation.
Unadjusted trial balance A. Expenses are recorded when incurred
Accrual basis of accounting B. Summarizes account balances in one
Cash basis of accounting location
C. Revenue is recorded when cash is received
Step 6: Financial Statements
14. Net income is reported on both the income statement and statement of owner’s equity.
A. True
B. False
15. The statement of owner’s equity displays all assets, liabilities and owner’s equity.
A. True
B. False
16. Which of these is NOT a financial statement?
A. Bank statement
B. Income statement
C. Balance sheet
D. Statement of cash flows
Accounting Essentials for Canada Page 3 of 5
, Test Bank
17. Match each financial statement to its best description.
Income statement A. Reports net income and owner drawing
Statement of owner’s equity B. Reports revenue, expenses and net income
Balance sheet C. Illustrates that assets = liabilities + owner’s
Statement of cash flows equity
D. Summarizes activities leading to a
company’s ending cash balance
18. Classify each item as a source document, a rule dictated within GAAP, or a financial statement.
Source Doc GAAP Rule Statement
A. Balance sheet
B. Invoice
C. Matching principle
D. Time-period principle
E. Statement of owner’s equity
F. Bank statement
Step 7: Closing Entries and the Post-Closing Trial Balance
19. Permanent accounts are closed and transferred to the owner’s capital account.
A. True
B. False
20. Rent Expense and Owner’s Drawing are examples of temporary accounts.
A. True
B. False
21. Which of these is a permanent account?
A. Rent Expense
B. Owner’s Drawing
C. Unearned Revenue
D. Rent Revenue
22. Match each item related to closing a company’s books to its best description.
Temporary accounts A. Revenue, expenses and drawing
Permanent accounts B. Report created in the last step in the
Post-closing trial balance accounting cycle
Closing process C. The act of resetting certain accounts to zero
D. Accounts that remain after the closing
process ends
Accounting Essentials for Canada Page 4 of 5
