26 Free Test Bank for Financial Accounting 1st Canadian Edition by Waybright 

Stay on track for your next exam with 26 free test bank for Financial Accounting 1st Canadian Edition by Waybright multiple choice questions. This free financial accounting test bank focuses on important knowledge of chapter 1 on business, accounting, and you and showcases friendly format to refresh and qualify your practice. Once you have completed this free online authoritative textbook test bank, you can increase the chances of rocking your exam, get to know your strengths and weaknesses and understand the pattern of the test questions. Hopy you enjoy and benefit from practising it!

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Which of the following is considered an asset?

•  A) Accounts payable
•  B) Sales
•  C) Accounts receivable
•  D) Common shares
•  E) Notes payable

If total assets remain the same and total shareholders' equity increases, liabilities will:

•  A) increase by the same amount.
•  B) decrease by the same amount.
•  C) remain the same.
•  D) increase by a different amount.
•  E) decrease by a different amount.

Which of the following is a written promise to pay?

•  A) Accounts receivable
•  B) Accounts payable
•  C) Notes payable
•  D) Dividends payable
•  E) Notes receivable

Brandon borrowed money for his business from a local bank. What accounts will be affected?

•  A) Cash and accounts payable
•  B) Cash and notes payable
•  C) Accounts payable and revenue
•  D) Accounts receivable and revenue
•  E) Cash and accounts receivable

Cash and accounts receivable are both a part of:

•  A) assets.
•  B) retained earnings.
•  C) liabilities.
•  D) common shares.
•  E) preferred shares

Liabilities represent:

•  A) items owned by the company.
•  B) future economic benefits of the company.
•  C) earnings kept in the business.
•  D) monies owed to third parties.
•  E) monies owed to shareholders

Which of the following is a true statement?

•  A) Purchasing office equipment for cash is a shift of assets.
•  B) Buying something on account decreases total liabilities.
•  C) Retained earnings do not include payments of dividends.
•  D) Paying off an account increases the total of assets.
•  E) Selling something on account increases total liabilities.

Which of the following financial statements illustrates the accounting equation?

•  A) Statement of retained earnings
•  B) Income statement
•  C) Balance sheet
•  D) Statement of cash flows

Canadian accounting standards for private enterprises (ASPE) continues to use:

•  A) present value.
•  B) current cost.
•  C) realizable value.
•  D) historical cost approach.
•  E) net present value.

Accounting principles include:

•  A) cost, revenue recognition, and going concern.
•  B) cost, revenue recognition, and timeliness.
•  C) cost, revenue recognition, and full disclosure.
•  D) cost, economic entity, and full disclosure.
•  E) cost, economic entity, and revenue recognition.

Target would primarily be considered a:

•  A) manufacturing business.
•  B) merchandising business.
•  C) service business.
•  D) not-for-profit business.
•  E) private enterprise.

To ensure that the guidelines for right behaviour are followed, a corporation should follow:

•  A) ethical principles.
•  B) accounting law.
•  C) the corporate culture.
•  D) the leaders in their category of business.
•  E) the Enron rules.

Which of the following types of organization would probably sell goods?

•  A) Merchandising operation
•  B) Service operation
•  C) Not-for-profit operation
•  D) Manufacturing operation
•  E) Business operation

Revenues would have which of the following effects on the accounting equation?

•  A) Decrease shareholders' equity
•  B) Increase common shares
•  C) Increase liabilities
•  D) Increase shareholders' equity
•  E) Decrease assets

Jenny opens her business by investing $12,000. How does this affect the accounting equation?

•  A) Increase in assets; increase in shareholders' equity.
•  B) Increase in liabilities; increase in shareholders' equity.
•  C) Decrease in assets; increase in shareholders' equity.
•  D) Increase in assets; decrease in shareholders' equity.
•  E) The accounting equation does not change.

The main goal of understanding the process of accounting is to help ensure that the business is:

•  A) profitable.
•  B) ethical.
•  C) competitive.
•  D) admired by the customer.
•  E) environmentally friendly.

Mathew owns an art supplies store. In the initial accounting records, he included his personal computer and all of his personal art supplies. Mathew is violating what principle of accounting?

•  A) Going concern
•  B) Cost
•  C) Reliability
•  D) Economic entity
•  E) Materiality