FA chapter 1 quick check

1. 1All of the following statements are true except one. Which statement is false?

   1. AThe organization that formulates IFRS is the International Accounting Standards Board.
   2. B. Users of financial information are limited to shareholders of the company.
   3. CProfessional accountants are held to a high standard of ethical conduct.
   4. DBookkeeping is only a part of accounting
2. 2Which of the following items are fundamental qualitative characteristics of financial
   information?

   1. AGoing concern and accrual accounting
   2. BRelevance and faithful representation
   3. C. Materiality and Cost-benefits
   4. DAssets and Liabilities
3. 3. The accounting equation can be expressed as:

   1. AAssets = Liabilities − Owners’ Equity
   2. BAssets + Liabilities = Owners’ Equity
   3. CAssets − Liabilities = Owners’ Equity
   4. DOwners’ Equity − Assets = Liabilities
4. 4The nature of an asset is best described as:

   1. Aan economic resource that’s expected to benefit future operations
   2. Bsomething with physical form that’s valued at cost in the accounting records
   3. Csomething owned by a business that has a ready market value
   4. Dan economic resource representing cash or the right to receive cash in the future
5. 5Which financial statement covers a period of time?

   1. ABalance Sheet
   2. B. Income Statement
   3. CStatement of cash flows
   4. D. Both b and c
6. 6How would net income be most likely to affect the accounting equation?

   1. AIncrease assets and increase liabilities
   2. B. Decrease assets and decrease liabilities
   3. CIncrease liabilities and decrease shareholders’ equity
   4. DIncrease assets and increase shareholders’ equity
7. 7During the year, EcoWash has $120,000 in revenues, $50,000 in expenses, and $4,000 in
   dividend payments. Shareholders’ equity changed by

   1. A+$66,000
   2. B+$70,000
   3. C+$74,000
   4. D. −$66,000
8. 8During the year, EcoWash has $120,000 in revenues, $50,000 in expenses, and $4,000 in
   dividend payments. Shareholders’ equity changed by:
   
   EcoWash in question 7 had a

   1. Anet loss of $50,000
   2. B. net income of $70,000
   3. Cnet income of $66,000
   4. D. net income of $120,000
9. 9Rochester Corporation holds cash of $11,000 and owes $27,000 in accounts payable.
   Rochester has accounts receivable of $40,000, inventory of $34,000, and land that cost
   $55,000. How much are Rochester’s total assets and liabilities?

   1. ATotal Assets: 129,000 Liabilities: 27,000
   2. BTotal Assets: 27.000 Liabilities: 140.000
   3. CTotal Assets: 140.000 Liabilities: 27.000
   4. DTotal Assets: 140.000 Liabilities: 93.000
10. 10Which item(s) is (are) reported on the Balance Sheet?

    1. AInventory
    2. BAccounts payable
    3. CRetained earnings
    4. DAll of the above

11. 11During the year, McKenna Company’s shareholders’ equity increased from $38,000 to
    $50,000. McKenna earned net income of $18,000. How much in dividends did McKenna
    declare and paid during the year?

    1. A$0 (no dividends were paid)
    2. B$6,000
    3. C$12,000
    4. D$7,000
12. 12Javis Company had total assets of $340,000 and total shareholders’ equity of $130,000 at
    the beginning of the year. During the year assets increased by $70,000 and liabilities increased by $25,000. Shareholders’ equity at the end of the year is:

    1. A$95,000
    2. B$175,000
    3. C$200,000
    4. D$155,000
13. 13Which of the following is a true statement about International Financial Reporting
    Standards?
    

    1. AThey are newer than US financial reporting standards.
    2. BThey require less judgement than other accounting standards
    3. CThey have been adopted (or allowed as an alternative) by many countries and territories
       around the world.
    4. DThey are worse than local accounting standards as they do not understand local business
       conditions and practices
14. 14Which of the following is the most accurate statement regarding ethics as applied to decision making in accounting?

    1. AEthics involves making difficult choices under pressure, and should be kept in mind in
       making every decision, including those involving accounting
    2. BEthics has no place in accounting, since accounting deals purely with numbers
    3. C. It is impossible to learn ethical decision making, since it is just something you decide to
       do or not to do
    4. DEthics is becoming less and less important as a field of study in business

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Quiz on FA chapter 1 quick check, created by meli ssa on 23/02/2019.

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