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Financial Statements (Quiz)

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If you have difficulty answering the following questions, learn more about this topic by reading our Financial Statements (Explanation).


  1. 1.

    Which accounting method will result in financial statements that report a more complete picture of a corporation’s financial position and a better measure of profitability during a recent accounting year?

    Accrual Method
    Right!
    Cash Method
    Wrong.
  2. 2.

    Which type of journal entries are made at the end of each accounting period so that the financial statements better reflect the accrual method of accounting?

    Adjusting
    Right!
    Closing
    Wrong.
    Reversing
    Wrong.
  3. 3.

    The generally accepted accounting principles used in the financial statements of U.S corporations are researched and developed by which organization?

    American Accounting Association (AAA)
    Wrong.
    Financial Accounting Standards Board (FASB)
    Right!
    Internal Revenue Service (IRS)
    Wrong.
  4. 4.

    Which financial statement will allow you to determine the gross margin for a retailer or manufacturer?

    Balance Sheet
    Wrong.
    Income Statement
    Right!
    Statement Of Cash Flows
    Wrong.
    Statement Of Comprehensive Income
    Wrong.
    Statement Of Stockholders’ Equity
    Wrong.
  5. 5.

    Does the heading of a balance sheet indicate a period of time or a point in time?

    Period Of Time
    Wrong.
    Point In Time
    Right!
  6. 6.

    A corporation's net income will cause a change in which component of stockholders' equity?

    Accumulated Other Comprehensive Income
    Wrong.
    Paid-in Capital
    Wrong.
    Retained Earnings
    Right!
  7. 7.

    Which financial statement's structure is closest to that of the basic accounting equation?

    Balance Sheet
    Right!
    Income Statement
    Wrong.
    Statement Of Cash Flows
    Wrong.
    Statement Of Comprehensive Income
    Wrong.
    Statement Of Stockholders’ Equity
    Wrong.
  8. 8.

    Is it true or false that a grocery store’s sale of its old delivery van to one of its employees for $2,000 should be recorded in the general ledger account Sales?

    True
    Wrong.
    False
    Right!
  9. 9.

    Is it true or false that the total amount of stockholders’ equity reported on the balance sheet is intended to show the fair market value of the corporation?

    True
    Wrong.
    False
    Right!
  10. 10.

    Comprehensive income is defined as _______________ plus other comprehensive income.

    Extraordinary Items
    Wrong.
    Gains And Losses
    Wrong.
    Net Income
    Right!
  11. 11.

    Which financial statement reports the adjustments for changes in the market value of available-for-sale investment securities and adjustments for foreign currency translation?

    Statement Of Cash Flows
    Wrong.
    Statement Of Comprehensive Income
    Right!
    Statement Of Income
    Wrong.
  12. 12.

    Ten years ago, a corporation started a new brand name that is now considered to be its most valuable asset. On which financial statement and at what amount will you see the brand name reported?

    Balance Sheet At Its Present Value
    Wrong.
    Statement Of Comprehensive Income With No Value
    Wrong.
    Not Reported On A Financial Statement
    Right!
  13. 13.

    A corporation's working capital is calculated using which amounts?

    Total Assets and Total Liabilities
    Wrong.
    Total Assets and Current Liabilities
    Wrong.
    Current Assets and Current Liabilities
    Right!
  14. 14.

    The changes that occurred during a recent year in the accounts Retained Earnings and Treasury Stock will be found in which financial statement?

    Balance Sheet
    Wrong.
    Income Statement
    Wrong.
    Statement Of Cash Flows
    Wrong.
    Statement Of Comprehensive Income
    Wrong.
    Statement Of Stockholders’ Equity
    Right!
  15. 15.

    The amount spent for capital expenditures will be reported in which section of the statement of cash flows?

    Cash Provided/used In Financing Activities
    Wrong.
    Cash Provided/used In Investing Activities
    Right!
    Cash Provided/used In Operating Activities
    Wrong.
    Supplemental Information
    Wrong.
  16. 16.

    Which of the following will appear as a negative amount on a statement of cash flows that was prepared using the indirect method?

    A Decrease In Inventory
    Wrong.
    An Increase In Accounts Payable
    Wrong.
    An Increase In Accounts Receivable
    Right!
    Depreciation Expense
    Wrong.
  17. 17.

    Which of the following will appear as a positive amount on a statement of cash flows that was prepared using the indirect method?

    An Increase In Accounts Receivable
    Wrong.
    An Increase In Inventory
    Wrong.
    A Decrease In Accounts Payable
    Wrong.
    Depreciation Expense
    Right!
  18. 18.

    What is usually presented first in the notes to the financial statements?

    Accumulated Other Comprehensive Income
    Wrong.
    Commitments And Contingencies
    Wrong.
    Significant Accounting Policies
    Right!
  19. 19.

    Which is the annual report to the SEC that contains the financial statements of a publicly-traded corporation?

    Form 1040
    Wrong.
    Form 10-K
    Right!
    Form 10-Q
    Wrong.
    Schedule C
    Wrong.
  20. 20.

    Important disclosures regarding likely losses that could not be estimated are found where?

    General Ledger Accounts
    Wrong.
    Income Statement
    Wrong.
    Notes To The Financial Statements
    Right!

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