ca_exm_fa1_2008-03

ca_exm_fa1_2008-03 - EFA1M08 ©CGA-Canada 2008 Page 1 of 9...

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Unformatted text preview: EFA1M08 ©CGA-Canada, 2008 Page 1 of 9 CGA-CANADA FINANCIAL ACCOUNTING FUNDAMENTALS [FA1] EXAMINATION March 2008 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 statements is true with respect to a multiple-step income statement? 1) It does not present the subtotal gross profit from sales. 2) It presents cost of goods sold with selling and administration expenses to arrive at a single total for all expenses. 3) It presents non-operating revenues as part of total revenues. 4) It presents other expenses (non-operating expenses) separately from normal operating expenses. b. Which of the following statements is true with respect to physical inventory counts? 1) The inventory counts are the only way that ending inventory and cost of goods sold can be determined under a perpetual inventory system. 2) The inventory counts are used in a periodic inventory system to identify shrinkage and bookkeeping errors. 3) The inventory counts are not normally completed at year end. 4) The inventory counts are normally completed at least once a year regardless of the type of inventory system used. c. A $120 cheque for office supplies purchased was incorrectly recorded as a payment of $210. The error was found when the bank account was reconciled at month end. How would the error be reflected on the month-end bank reconciliation? 1) $90 addition to the balance per bank 2) $90 deduction from the balance per bank 3) $90 addition to the balance per books 4) $90 deduction from the balance per books Continued... EFA1M08 ©CGA-Canada, 2008 Page 2 of 9 d. Ror Ltd.’s bank incorrectly credited the company’s bank statement with a $430 deposit. The error was discovered by the company when the bank account was reconciled at month end. How would the error be reflected on the month-end bank reconciliation? 1) $430 addition to the balance per bank 2) $430 deduction from the balance per bank 3) $430 addition to the balance per books 4) $430 deduction from the balance per books e. Which of the following would not be included as part of property, plant and equipment on a company’s balance sheet? 1) $25,000 purchase cost of a trademark 2) $25,000 purchase cost of new manufacturing equipment 3) $25,000 purchase cost of used manufacturing equipment 4) $25,000 purchase cost of land Note: Use the following information to answer parts (f) and (g)....
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