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WorksheetsBAT Chapter 1 Review
Total questions: 15
Worksheet time: 10mins
Which of the following characteristics are related to corporations as opposed to partnerships and sole proprietorships?
Simple to form, unlimited legal liability, limited life
Limited legal liability, limited life, income taxes on profit paid by the organization
More than one owner, income taxes on profit paid by the owners, unlimited legal liability
Income taxes paid by the organization, limited legal liability, indefinite life
Which of the following statements about the going concern assumption is correct?
The going concern assumption is the assumption that the economic entity will continue to operate in the future.
Under the going concern assumption, all of the business's assets must be reported at their fair value.
The financial statements must report whether or not a company is a going concern.
The going concern assumption is not followed under IFRS.
Which of the following items is not reported on the statement of owner's equity?
Investment by the owner
Drawings
Profit
Revenues
As at December 31, after its first year of operations and before the closing process, Stoneland Company has assets of $8,500; revenues of $6,000; expenses of $3,500; owner's capital of $5,000; and drawings of $500. What are the liabilities for Stoneland Company as at December 31?
$1,500
$2,500
$500
$3,500
Genesis Company buys a $10,000 machine on credit. Initially, this transaction will only affect the:
Income statement
Balance sheet
Income statement and Statement of owner's equity
Income statement, statement of owner's equity, and balance sheet
Bing Company pays $700 for store rent for the month. The basic analysis of this transaction on the accounting records is:
the asset Cash is increased by $700 and the expense Rent Expense is increased by $700
the asset Cash is decreased by $700 and the expense Rent Expense is increased by $700
the asset Cash is decreased by $700 and the liability Rent Payable is increased by $700
the asset Cash is increased by $700 and the liability Rent Payable is decreased by $700
Which of the following statements about the income statement and balance sheet is correct?
The income statement and the balance sheet both show information as at a specific point in time.
The income statement shows information as at a specific point in time; the balance sheet shows information for a specified time period.
The income statement and the balance sheet both show information for a specified time period.
The income statement shows information for a specified time period; the balance sheet shows information as at a specific point in time.
An external use could be:
employees
management
Canada Revenue Agency
human resources director
The proprietorship form of business organization:
must have at least 3 owners in most provinces
represents the largest number of businesses in Canada
combines the records of the business with the personal records of the owner
is characterized by a legal distinction between the business as an economic unit and the owner
Judy and Marilyn met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a(n):
non-profit organization
partnership
corporation
proprietorship
GAAP stands for:
Generally Accepted Accounting Principles
Generally Accepted Auditing Procedures
Generally Accepted Auditing Principles
Generally Accepted Accounting Procedures
Which of the following principles or assumptions requires that the activities of a business be kept distinct from those of its owner(s)
Monetary unit assumption
Going concern assumption
Economic entity concept
Cost principle
Withdrawal of cash from a business by the owner for personal reasons will NOT affect which financial statement?
Balance sheet
Income statement
Statement of owner's equity
Cash flow statement
The common characteristic possessed by all assets is:
long life
great monetary value
tangible nature
future economic benefit
Which of the following would best be described as an ownership claim on a company's assets?
expenses
accounts receivable from the owner
owner's equity
liabilities
