21. Which of the following statements best describes the balance sheet?
A. It provides information about the financial position of an entity at a specific point in time.
B. It measures the economic performance of the entity over a period of time.
C. It summarizes only the changes to retained earnings during a period.
D. It shows how an entity managed its cash during the reporting period.
22. Which of the following statements best describes the statement of comprehensive income?
A. It provides information about the financial position of an entity at a specific point in time.
B. It measures economic events that involve non-owners but affect equity.
C. It summarizes the changes to shareholders' equity during a period.
D. It is an extension of the balance sheet.
23. Which of the following statements best describes the income statement?
A. It provides information about the financial position of an entity at a specific point in time.
B. It measures the economic performance of the entity over a period of time.
C. It summarizes the changes to retained earnings during a period.
D. It shows how an entity managed its cash during the reporting period.
24. Which of the following statements best describes the Statement of Changes in Equity?
A. It provides information about the financial position of an entity at a specific point in time.
B. It measures the economic performance of the entity over a period of time.
C. It summarizes the changes to shareholders' equity during a period.
D. It shows how an entity managed its cash during the reporting period.
25. Which of the following statements best describes the cash flow statement?
A. It provides information about the financial position of an entity at a specific point in time.
B. It measures the economic performance of the entity over a period of time.
C. It summarizes the changes to retained earnings during a period.
D. It shows how an entity managed its cash during the reporting period.
26. Which of the following statements about the cash flow statement is true?
A. The cash flow statement reports what the net income would be if the cash basis of accounting had been followed.
B. The cash flow statement deals with cash, an asset; therefore, the cash flow statement is a snapshot statement just like the balance sheet.
C. The cash flow statement does not have to be included in general purpose financial statements.
D. The cash flow statement shows how the company managed its money for the period from more than just operations.
27. The bookkeeper at Walin Ltd. has prepared a list of all the property, plant and equipment the company owns, including their original cost to the company and how much has been depreciated to date. Where will this information most likely be included in the company's general purpose financial statements?
A. On the balance sheet.
B. In the cash flow statement.
C. In the notes to the financial statements.
D. This information will not be included in the company's general purpose financial statements.
28. Brantford Business Ltd. (BBL) has a loan outstanding from a Canadian bank. It uses the loan to finance its working capital. The bank has asked for BBL to provide it with monthly listings of their accounts receivables and inventory items. The requested listing is an example of:
A. a special purpose report.
B. a general purpose report.
C. a balance sheet report.
D. a cash flow report.
29. What is the accounting equation?
A. Assets + Liabilities = Owners' Equity
B. Assets = Liabilities - Owners' Equity
C. Assets = Liabilities + Owners' Equity
D. Assets + Owners' Equity = Liabilities
30. In 2012, Smith's Corner Store had an increase in gross margin of $28,000; however, the gross margin percentage decreased. This is most likely caused by:
A. a decrease in volume and a decrease in selling price
B. an increase in volume and an increase in selling price.
C. an increase in volume and a decrease in selling price.
D. a decrease in volume and an increase in selling price.