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Unformatted text preview: EFA1D05 CGA-Canada, 2005 Page 1 of 9 CGA-CANADA FINANCIAL ACCOUNTING 1 EXAMINATION December 2005 Marks Time: 3 Hours Note: Narratives for journal entries are not required. 18 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 1 1 / 2 marks each a. Which of the following is not a characteristic of a corporation? 1) A corporation is a separate legal entity. 2) A corporation pays tax on its profits. 3) A corporations shareholders are subject to unlimited liability. 4) A corporation conducts business with the rights, duties, and responsibilities of a person. b. Which of the following financial statements presents the financial position of a business at a certain point in time? 1) Statement of owners equity 2) Income statement 3) Cash flow statement 4) Balance sheet c. In the last 4 years, Egnahc Ltd. has changed its method of inventory valuation from FIFO to weighted average, then back to FIFO. This selection of accounting principles would be in contravention of which of the following generally accepted accounting principles? 1) Matching principle 2) Consistency principle 3) Cost principle 4) Going-concern principle d. Hojey Co. purchased, on account, airline tickets costing $7,000 for the owners family vacation. Which of the following properly reflects the effect of this transaction on the accounting equation? 1) Assets decrease $7,000; no effect on liabilities; owners equity increases $7,000. 2) No effect on assets; liabilities increase $7,000; owners equity decreases $7,000. 3) Assets decrease $7,000; liabilities increase $7,000; no effect on owners equity. 4) No effect on assets; no effect on liabilities; no effect on owners equity. Continued... EFA1D05 CGA-Canada, 2005 Page 2 of 9 e. A companys cash account has a credit balance. Which of the following would cause the cash account to have a credit balance? 1) The company purchased $5,000 worth of supplies on account when the cash account balance was $4,000. 2) The company obtained a bank loan for $5,000 when the cash account balance was $4,000. 3) The company wrote a cheque for $5,000 when the cash account balance was $4,000. 4) The company received a cheque for $5,000 when the cash account balance was $4,000. f. Which of the following errors would not cause a trial balance to be out of balance? 1) In recording the purchase of inventory on account, the bookkeeper forgot to enter the debit side of the entry....
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This note was uploaded on 08/22/2009 for the course ACCT 1101 taught by Professor Davescott during the Fall '05 term at Niagara College.

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