Mos 1023 midterm questions

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Computer Science
Computer Science 1032A/B
Maria Ferraro

MOS 1023 MID TERM REVIEW QUESTIONS (solutions at end) 1. Which of the following statements is incorrect regarding private corporations: a. Shares in private corporations are not traded on public exchanges b. Private corporations do not need to follow International Accounting Standards c. Private corporations do not generally make their financial statements available to the public d. All of the above are correct 2. On a company balance sheet, which of the following is not a liability? a. Shareholder loan b. Lease obligation c. Common shares d. Mortgage 3. Which of these is NOT an investing activity? a. Purchasing a delivery van b. Building a factory c. Borrowing money for a retail expansion d. Selling obsolete factory machinery 4. Which of the following is NOT one of the three types of business activities. a. Investing b. Marketing c. Operating d. Financing 5. Another term for amortization expense is: a. Plant & equipment expense b. Depreciation expense c. Investment expense d. Legal expense 6. Which of the following is NOT an external user of financial statements a. Revenue Canada b. Creditors c. Labour unions d. Human resources department 7. Which financial statement is used to show the distribution of earnings to shareholders a. Balance sheet b. Statement of retained earnings c. Cash flow statement d. Statement of earnings 8. The debt to total assets ratio is calculated by dividing (a) long-term liabilities by total assets. (b) long-term liabilities by average assets. (c) total liabilities by total assets. (d) total liabilities by average assets 9. The balance sheet derives one figure in the equity section from which other financial statement a. Income statement b. Statement of retained earnings c. Cash flow statement d. Statement of earnings 10. The main responsibility for ethical behaviour rests on: A. Professional bodies. B. The Government. C. Employers. D The individuals involved 11. Accounting information should be verifiable in order to enhance (a) comparability. (b) faithful representation. (c) consistency. (d) relevance. 12. The conceptual framework of accounting does NOT guide decisions about a. What to present in financial statements b. Appropriate ways of communicating financial information c. Presentation of statements for Revenue Canada d. Alternative ways of reporting economic events 13 Which of the following is NOT a qualitative characteristic of accounting information a. Comparability b. Cost Benefit c. Faithful representation d. Understandability 14 The company’s policy toward dividends and growth could best be determined by examining the (a) balance sheet. (b) statement of earnings. (c) statement of retained earnings. (d) cash flow statement. 15 Current assets on a balance sheet are those whose benefit will normally be realized within what time period a. Quarterly b. Monthly c. Current assets are defined by dollar amount – not time d. One year 16 Which of the following is NOT a current asset a. Inventory b. Accounts receivable c. Goodwill d. Prepaid rent 17 Which is NOT a major section of a balance sheet a. Current assets b. Cost of goods sold c. Shareholder’s equity d. Long term liabilities 18 Ratios that measure the ability of a company to pay its short term obligations are classified as: a. Liquidity ratios b. Profitability ratios c. Liability ratios d. Solvency ratios 19 The current ratio is an indication of: a. Ability to cover short term obligations b. The difference between current assets and current liabilities c. Percentage of assets financed by creditors d. Free cash flow 20 McDonalds – in their 2009 annual report list $2.4 billion in goodwill. This would be: a. An entry in the equity section of the balance sheet b. An example of an intangible asset c. An estimate of the expected future profits d. The value placed on the company by its board of directors 21 For depreciated assets, the difference between cost and accumulated depreciation is referred to as: a. Carrying amount b. Amortization c. Closing inventory d. Future cost 22 . Which of the following is not normally an example of a profit centre? A. Production department of a manufacturing plant. B. An individual product line at Proctor and Gamble. C. A retail store. D. All of the above are examples of profit centres 23 Which of the following is the most liquid asset a. Accounts receivable b. Short term investment c. Petty cash d. Shares held in a subsidiary company 24 If you were interested in supplying fabric to Ralph Lauren, what financial figure(s) would you look at a. Liquidity ratios b. Goodwill c. Total equity d. Price earnings ratio 25 World-wide the most significant movement towards a common GAAP has been led by a. The United Sates b. The IASB c. The United Nations d. The World Bank 26 The International Financial Reporting Standards (IFRS) are a. Based on a specific set of rules b. Mandated in the United Sates by the Securities Commissions c. Enforced globally by the Canadian Accounting Standards Board d. Principles based 27 Which of these is a reason accounting standards differ from country to country a. Culture b. Legal systems c. Political & economic ties with other countries d. All of the above 28 What is the MAIN benefit of having global accounting standards? a. Neutrality b. Understandability c. Reliability d. Matching 29 On ABC Company’s financial statements, standards dictate that something is said to be “material” if a. It is an accurate description of a financial transaction undertaken by ABC Company b. Would cause an investor to sell their stock in the company c. It is more than 5% of net income d. All of the above 30 The branch of accounting used for business decisions is a. Financial accounting
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