Nguyen Lý Kế toán

The basic accounting equation, in a proprietorship, CANNOT berestated as

• a. Assets – Liabilities = Owner's Equity.

• b. Assets – Owner's Equity = Liabilities.

• c. Owner's Equity + Liabilities = Assets.

• d. Assets + Liabilities = Owner's Equity.

The International Accounting Standards Board

• a. works to reduce differences in accounting practices across countries.

• b. promotes unique accounting applications.

• c. works to increase differences in accounting practices across countries.

• d. only operates in countries which speak English.

Evan Guanzon owns and operates Guanzon’s Pizza Express. Evanshould record the cost of wages paid to store employees as a (an)

• a. revenue.

• b. expense.

• c. liability.

• d. asset.

Which of the following is true when considering the accountingequation?

• a. An increase in an asset must always equal a decrease in a liability.

• b. For every transaction an asset and a liability must be affected.

• c. An increase in a liability must equal a decrease in owner’s equity.

• d. An increase in an asset may result in a decrease in another asset.

The proprietorship form of business organization

• a. must have at least three owners in most provinces.

• b. represents the largest number of businesses in Canada.

• c. combines the records of the business with the personal records of theowner.

• d. is characterized by a legal distinction between the business as aneconomic unit and the owner.

An external user would NOT include

• a. A creditor of the company.

• b. Canada Revenue Agency.

• c. An employee.

• d. The company’s bank.

Which of the following is NOT an advantage of the corporate formof business organization?

• a. limited liability of shareholders

• b. transferability of ownership

• c. unlimited personal liability for shareholders

• d. unlimited life

Judy and Marilyn met at law school and decide to start a small lawpractice after graduation. They agree to split revenues andexpenses evenly. The most common form of business organizationfor a business such as this would be a(n)

• a. non profit organization.

• b. partnership.

• c. corporation.

• d. proprietorship.

The partnership form of business organization

• a. is a separate legal entity.

• b. is a common form of organization for service-type businesses.

• c. enjoys an unlimited life.

• d. has limited liability.

In a proprietorship, owner’s equity is affected by all of the followingEXCEPT

• a. the investment of cash by the owners.

• b. the purchase of a personal automobile by the owner using personal funds.

• c. the purchase of a computer for the owner’s son using cash generated bythe business.

• d. the sale of goods by the business.