12. Which one of the following would not affect shareholders' equity? a. Issuing additional common shares. b. Issuing additional preferred shares. c. A stock split. d. Payment of cash dividends. 13. A company uses the periodic inventory system. An error in the physical count of goods on hand at the end of the current period resulted in a $3,000 understatement of the ending inventory. The effect of this error in the current period is to: a. overstate cost of goods sold. b. understate cost of goods sold. c. overstate gross profit. d. overstate net income. 14. Which of the following would not be considered a merchandising operation? a. Wal-Mart. b. Sportchek, c. Goodlife Fitness. d. Futureshop. 15. For a merchandising firm Revenue less Cost of Goods Sold is called: . gross profit. b. net loss. c. net income. d. expenses. 16. Under a perpetual inventory system the journal entry to record a purchase of merchandise inventory on account would debit: a. Accounts Payable. b. Cost of Goods Sold. c. Purchases. d. Merchandise Inventory. 17. Which of the following methods of inventory valuation is not allowed in Canada for income tax calculations? a. Specific Identification. b. FIFO (First-In-First-Out). c. LIFO (Last-In-First-Out). d. Average Cost. 18. Which of the following is the main difference between general and limited partnerships? a. General partners have unlimited liability while limited partners do not. b. Limited partners have unlimited liability while general partners do not. c. General partnerships are able to raise more capital. d. General partnerships have more partners.

12. Which one of the following would not affect shareholders' equity? a. Issuing additional common shares. b. Issuing additional preferred shares. c. A stock split. d. Payment of cash dividends. 13. A company uses the periodic inventory system. An error in the physical count of goods on hand at the end of the current period resulted in a $3,000 understatement of the ending inventory. The effect of this error in the current period is to: a. overstate cost of goods sold. b. understate cost of goods sold. c. overstate gross profit.| d. overstate net income. 14. Which of the following would not be considered a merchandising operation? a. Wal-Mart. b. Soortchak. c. Goodife Fitness. d. Eutureshon. 15. For a merchandising firm Revenue less Cost of Goods Sold is called: a. gross profit. b. net loss. c. net income. d. expenses. 16. Under a perpetual inventory system the journal entry to record a purchase of merchandise inventory on account would debit: a. Accounts Payable. b. Cost of Goods Sold. c. Purchases. d. Merchandise Inventory. 17. Which of the following methods of inventory valuation is not allowed in Canada for income tax calculations? a. Specific Identification. b. FIFO (First-In-First-Out). c. LIFO (Last-In-First-Out). d. Avarage Cost. 18. Which of the following is the main difference between general and limited partnerships? a. General partners have unlimited liability while limited parthers do not. b. Limited partners have unlimited liability while general partners do not. c. General partnerships are able to raise more capital. d. General partnerships have more partners