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Unformatted text preview: EFA1J08 ©CGA-Canada, 2008 Page 1 of 8 CGA-CANADA FINANCIAL ACCOUNTING FUNDAMENTALS [FA1] EXAMINATION June 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 financial statements shows a company’s sources and uses of cash for a period of time? 1) Balance sheet 2) Income statement 3) Statement of owner’s equity 4) Cash flow statement b. Which of the following is one of the correct forms of the accounting equation? 1) Assets + Liabilities = Owner’s equity 2) Assets – Liabilities = Owner’s equity 3) Assets = Liabilities – Owner’s equity 4) Assets + Owner’s equity = Liabilities c. A customer pays cash for 1 year of lawn care service at the beginning of the contract year. The lawn care service company would record the receipt of cash as a liability. Which of the following would be recorded by the customer for the cash payment? 1) Asset 2) Liability 3) Cash outflow from investing activities 4) Cash outflow from financing activities d. Which of the following types of accounts are temporary accounts? 1) Assets, liabilities, and owner’s capital 2) Revenues and expenses 3) Assets and expenses 4) Liabilities and revenues Continued... EFA1J08 ©CGA-Canada, 2008 Page 2 of 8 e. A debit balance is the normal balance for which of the following accounts? 1) Unearned revenue 2) Sales revenue 3) Building 4) Accumulated amortization f. When posting a cash receipt in the amount of $3,400, a company’s bookkeeper correctly debited cash for $3,400 but forgot to post the credit to accounts receivable. Which of the following statements would be true with respect to the effect of this error on the trial balance? 1) The credit side of the trial balance would be $3,400 higher than the debit side of the trial balance. 2) The credit side of the trial balance would be $6,800 higher than the debit side of the trial balance. 3) The debit side of the trial balance would be $3,400 higher than the credit side of the trial balance. 4) The debit side of the trial balance would be $6,800 higher than the credit side of the trial balance. g. In November 2007, a company received $4,000 cash from a client for consulting services to be performed. The company recorded the receipt as a debit to cash and a credit to consulting revenue. On November 30, the company had not yet performed the consulting services. Therefore, the company made an adjusting entry on November 30, 2007 to debit consulting revenue $4,000 and credit unearned consulting revenue $4,000. This adjustment is an example of the application of which of the unearned consulting revenue $4,000....
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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.
- Spring '11
- Financial Accounting