ca_exm_fa1_2004-03 - CGA-CANADA FINANCIAL ACCOUNTING 1...

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Unformatted text preview: CGA-CANADA FINANCIAL ACCOUNTING 1 EXAMINATION March 2004 Marks Time: 3 Hours 9 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 (1) is the best answer for item (a), 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. No account will be taken of any explanations you offer. Note: 1 1 / 2 marks each a. Dietrich Co. completed work for a client and billed $8,000 to be paid within 30 days. Which of the following statements correctly reflects the effect of this transaction? 1) Assets will increase by $8,000, liabilities will increase by $8,000, and there will be no change in owners equity. 2) There will be no change in assets, liabilities, or owners equity. 3) Assets will increase by $8,000, liabilities will not change, and owners equity will increase by $8,000. 4) There will be no change in assets, liabilities will decrease by $8,000, and owners equity will increase by $8,000. b. Ronald Co. paid $3,000 owed to a supplier from whom Ronald had bought merchandise the previous year. Which of the following statements best reflects this transaction? 1) There will be no change in total assets, total liabilities, or total owners equity. 2) Assets will decrease by $3,000, there will be no change in liabilities, and owners equity will decrease by $3,000. 3) Assets will decrease by $3,000, liabilities will decrease by $3,000, and there will be no change in owners equity. 4) Assets will decrease by $3,000, liabilities will decrease by $3,000, and owners equity will decrease by $3,000. c. An accountant who voluntarily offers information about a client, which is not public information, will be in violation of which ethical standard? 1) Competence 2) Objectivity 3) Integrity 4) Confidentiality d. Which of the following statements describes the revenue recognition principle? 1) The principle that requires that revenue information be supported by evidence 2) The principle that requires that revenue be matched with costs incurred in a period 3) The principle that requires that revenue be recorded only when the earning process is complete 4) The principle that requires that revenue be recorded only when cash is received Continued... EFA1M04 CGA-Canada, 2004 Page 1 of 9 e. The owner of Smiths Jewelery included the cost of her winter vacation to Mexico as part of travel expenses in the companys income statement for the year ended December 31, 2002. This recording of travel costs goes against which of the following fundamental assumptions of accounting?...
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ca_exm_fa1_2004-03 - CGA-CANADA FINANCIAL ACCOUNTING 1...

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