ca_exm_fa1_2007-12

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Unformatted text preview: EFA1D07 ©CGA-Canada, 2007 Page 1 of 8 CGA-CANADA FINANCIAL ACCOUNTING FUNDAMENTALS [FA1] EXAMINATION December 2007 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. What financial statement would reveal how much cash was generated from operating activities during a period of time? 1) Income statement 2) Balance sheet 3) Statement of owner’s equity 4) Cash flow statement b. Which of the following refers to the value of assets a company receives in exchange for products and services provided to customers? 1) Common stock 2) Liability 3) Revenue 4) Expense c. What is the form of business organization in which all of the owners have limited liability? 1) Sole proprietorship 2) Partnership 3) Limited partnership 4) Corporation d. Johnson Ltd. receives $200,000 cash from a customer in settlement of its account receivable. Which of the following correctly describes the effect of this transaction on Johnson’s accounting equation? 1) Increase assets $200,000, no impact on liabilities, increase owner’s equity $200,000 2) No impact on assets, decrease liabilities $200,000, increase owner’s equity $200,000 3) No impact on assets, no impact on liabilities, no impact on owner’s equity 4) Increase assets $200,000, increase liabilities $200,000, increase owner’s equity $200,000 Continued... EFA1D07 ©CGA-Canada, 2007 Page 2 of 8 e. Which of the following types of accounts are permanent accounts? 1) Assets, liabilities, and owner’s capital 2) Revenues and expenses 3) Assets and expenses 4) Liabilities and revenues f. What do debits record? 1) Increases in assets, increases in liabilities, and increases in revenues 2) Decreases in assets, decreases in liabilities, and decreases in revenues 3) Increases in assets, decreases in liabilities, and increases in expenses 4) Decreases in assets, increases in liabilities, and increases in revenues g. When posting a cash payment in the amount of $1,850, a company’s bookkeeper correctly debited accounts payable for $1,850, but incorrectly credited cash for $1,580. Which of the following statements would be true with respect to the effect of this error on the trial balance? 1) The debit side of the trial balance would be $540 higher than the credit side of the trial balance....
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This note was uploaded on 06/10/2011 for the course ACCT 1204 taught by Professor Chang during the Spring '11 term at Nanjing University.

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