TRUE/FALSE 1. The majority of business in Canada is conducted by corporations. ANS: T PTS: 1 DIF: Easy OBJ: 1-2 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 2. The three main business activities are financing, operating, and investing. ANS: T PTS: 1 DIF: Easy OBJ: 1-2 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-03-Business Forms 3. Internal users of accounting information include present creditors and management. ANS: F PTS: 1 DIF: Easy OBJ: 1-1 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-01-Purpose 4. The income statement summarizes the assets, liabilities and shareholders’ equity for a period of time. ANS: F PTS: 1 DIF: Easy OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 5. The four basic financial statements are the income statement, statement of retained earnings, balance sheet, and statement of cash flows. ANS: T PTS: 1 DIF: Easy OBJ: 1-3 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 6. The amount of earnings distributed to shareholders can be found in the income statement as an expense. ANS: F PTS: 1 DIF: Moderate OBJ: 1-5 | 1-6 NAT: AICPA FN-Reporting | AACSB Communication | ACBSP-APC-09-Financial Statement 7. Shareholders’ equity is composed of two main sources: liabilities and contributed capital.