Accounting, Tenth Canadian Edition Chapter Number: 01

Question type: Multiple
Choice

1) The financial
statements most frequently provided include all of the following except the:

a) balance sheet.
b) cash flow
statement
c) statement of
surplus.
d) income
statement.

2) The term GAAP
means:

a) generally
accepted accounting practices.
b) generally
accepted accounting principles.
c) generally
accepted auditing practices.
d) generally
accepted accounting purposes.

3) Which of the following statements is not consistent
with the practice of accounting?

a) Accounting
theory and practice have remained static since their inception hundreds of
years ago.
b) The
responsibility placed on the accounting profession is greater today than ever
before.
c) Accounting is
largely a product of its environment.
d) Accounting has
three essential characteristics.

4) Financial accounting and managerial
accounting have which common characteristic?

a) Both culminate
in the preparation of financial statements.
b) Both focus on
preparation of information for use by internal and external stakeholders.
c) Both are
concerned with communication of financial information.
d) Both require
financial information prepared in accordance with GAAP.

5) Which of the following statements accurately
describes the accounting profession’s role in the capital allocation process?

a) Accounting rules are
set by banks and other lending institutions which provide capital.
b) Company performance is
measured by accountants and communicated to investors.
c) Only public companies
are affected by the capital allocation process.
d) The capital allocation
process is regulated by the Financial Accounting Standards Board (FASB).

6) All of the
following are objectives of financial reporting except to provide information:

a) about entity
resources, claims to those resources, and changes to them.
b) that is useful
in capital allocation decisions.
c) about the major
shareholders of an entity.
d) that is useful in
assessing management stewardship.

7) Which of the following stakeholders do not
typically rely on the financial statements to make resource allocation
decisions?

a) Investors
b) Creditors
c) Analysts
d)
Standard-setters

8) By virtue of the Canadian Business
Corporations Act, which organization has primary responsibility for setting
GAAP for private companies in Canada?

a) Accounting
Standards Board
b) Accounting
Standards Oversight Council
c) Canadian Public
Accountability Board
d) Financial
Accounting Standards Board