D Question 6 Multiple Choice (10 Marks-0.5/question) 2 **Please only enter your response in the blue cell (in column H). This is the only cell that will be marked. 5 6 8 On February 1, a company issued 10,000 common shares in exchange for $70,000 cash. The transaction recorded in the account equation would include a(n): a) increase to common shares of $10,000 b) increase to cash of $10,000 c) increase to cash of $70,000 d) decrease to common shares of $70,000 10 2 Type of user who would most likely ask question "Will the company be able to repay the money 11 we lend them when the loan comes due?" 12 a) lenders N. 13 b) production manager 14 c) customers 15 d) investors 16 173 Which of the following is an example of an operating activity in the cash flow stateme 18 a) paying dividends 19 b) sale of investment in other companies' shares 20 c) purchase of property, plant, and equipment 21 d) payment of wages to employees 22 4 Rogers Gibson Stein: A medium size law firm operating in Edmonton John Rogers, Michelle Gibson and Simon Stein are the partners and they have 32 employees. What type of business 23 organization would be most fitting for the company described? 4 a) sole proprietorship b) partnership c) corporation d 1 Bonus Question 2 Income Statement Question 3 Cash Flow Statement Question 4 Bank Reconciliation Questi B H 7 41 42 b 43 Why does net income differ from cash flows from operating activities? a) Net income contains non-cash items such as depreciation b) Operating cash flows is calculated using accrual accounting while net income uses the cash basis c) Net Income includes operating, investing and financing cash flows d) Net Income excludes provisions for taxes 45 46 8 47 48 49 50 51 52 An enhancing qualitative characteristic of useful information that means that different knowledgeable and independent users could reach a consensus that the information is faithfully represented a) comparability b) understandability c) timeliness d) verifiability 9 53 54 55 56 67 8 Phillip Co. completes snow removal for the month of January. He leaves the invoice in his customers mailbox, however, will not receive pament until some time in February. Phillip Co. records the revenue in January, Phillip Co is applying the concept of a) cash based accounting b) accrual accounting c) tax based accounting d) time based accounting 10 Measures the resources controlled by a company assets) and the claims on those resources (by creditors and investors) at a given point in time a) Statement of retained earnings b) Balance Sheet c) Income Statement d) Statement of Cash Flow