C1: INTRO

Question 1

Shareholders and investors are also known as:

Answer 1

Owners

Question 2

________ lend money / extend credit to a business.

Answer 2

Creditors

Question 3

What does CRA stand for?

Answer 3

Canada Revenue Agency

Question 4

Who are usually the internal users of a financial statement?

Answer 4

Management

Question 5

Who are the federal taxing authority in Canada?

Answer 5

Canada Revenue Agency

Question 6

Your personal assets are NOT at risk if you form which type of business?

Answer 6

Corporation

Question 7

Owners are responsible for debts of the company if it is a:

Answer 7

Proprietorship or Partnership

Question 8

T/F: Partnerships are the most expensive to establish and maintain.

Answer 8

False

Question 9

What are common shares?

Answer 9

Certificates that represent portions of ownership in a corporation.

Question 10

Raising funds to support other activities by issuing new shares or borrowing money is an example of:

Answer 10

Financing Activities

Question 11

Purchase shares seeking to generate return.

Answer 11

Shareholders (Investors)

Question 12

Payments made by a company to shareholders that represent a portion of the company’s net income.

Answer 12

Dividends

Question 13

Gain or increase in value in a company’s share price.

Answer 13

Capital Appreciation

Question 14

Total claim on asset.

Answer 14

Shareholder’s Equity

Question 15

What are earnings that are kept within a company?

Answer 15

Retained Earnings

Question 16

Are inflows positive or negative?

Answer 16

Positive, as it is money going into the business.

Question 17

Investing Activities include:

Answer 17

Proceeds/purchase of property, plant, and equipment.

Question 18

Inflows from sales and outflows from payment of expense affects which business activity?

Answer 18

Operating Activity

Question 19

Payments of dividends and issuance of shares affect which business activity?

Answer 19

Financing Activity

Question 20

How is profit calculated?

Answer 20

Expense - Income

Question 21

The one-year period that represents a company’s operating year.

Answer 21

Fiscal Year

Question 22

Net assets of a company:

Answer 22

Equity

Question 23

How soon something will be received/paid:

Answer 23

Liquidity.

Question 24

Funds that are available for use in the company:

Answer 24

Working Capital

Question 25

What is the Accounting Equation?

Answer 25

Assets = Liability + S/H Equity

Question 26

What has probable future benefits?

Answer 26

Assets

Question 27

Current assets - Liability = ?

Answer 27

Working Capital

Question 28

If something will not be received or paid within 12 months from the fiscal year end, it is:

Answer 28

Non-Current

Question 29

Liabilities have probable future ____:

Answer 29

Sacrifice (or expense)

Question 30

Cash, investments, accounts receivable, inventory, and prepaid expense are examples of:

Answer 30

Current Assets

Question 31

Present / past obligations are:

Answer 31

Liabilities

Question 32

Notes payable, deferred income taxes, and long-term debt are examples of:

Answer 32

Non-current Liabilities

Question 33

What is included in a Statement of Financial Position?

Answer 33

Assets, Liability, and S/H Equity

Question 34

All transactions, regardless of their nature, must be recorded when they occur.

Answer 34

Incurred