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- 1. Multiple Choice
Which financial statement displays the revenues and expenses of a company for a period of time?
INCOME STATEMENT
BALANCE SHEET
CASH FLOW STATEMENT
STATEMENT OF STOCKHOLDER’S EQU
- 2. Multiple Choice
What is the main purpose of financial accounting?
ORGANIZE FINANCIAL INFORMATION
PROVIDE USEFUL, FINANCIAL INFORMATION TO OUTSIDERS
KEEP TRACK OF COMPANY EXPENSES
MINIMIZE COMPANY TAXES
- 3. Multiple Choice
Which of these is not included as a separate item in the basic accounting equation?
ASSETS
REVENUES
LIABILITIES
STOCKHOLDER’S EQUITY
- 4. Multiple Choice
The account format that displays debits, credits, balances, and headings.
GENERAL JOURNAL
GENERAL LEDGER
T-ACCOUNT
LEDGER ACCOUNT
- 5. Multiple Choice
Which account increases equity?
EXPENSES
WITHDRAWALS
TREASURY STOCK
REVENUES
- 6. Multiple ChoiceWhich principle/guideline requires the company's financial statements to have footnotes containing information that is important to users of the financial statements?Historical PrincipleBusiness EntityAccrual PrincipleAdequate disclosure Principle
- 7. Multiple ChoiceAll properties and services acquired by the business must be recorded at their original acquisition cost. This principle pertains to..Historical PrincipleBusiness EntityAccrual PrincipleObjectivity principle
- 8. Multiple ChoiceProviding financial accounting information about economic activities for specified time/accounting periods.. This principle pertains to..Accrual PrincipleBusiness EntityPeriodicity PrincipleObjectivity principle
- 9. Multiple ChoiceIt is a measurement of financial position of the company.Income StatementBalance SheetCash Flow StatementAdequate disclosure Principle
- 10. Multiple ChoiceIt is a measurement of performance (shows the profit or loss) of the company.Income StatementBalance SheetCash Flow StatementStatement of Owner's Equity
- 11. Multiple ChoiceYou want to know the cost of goods sold by the business in a particular period. What is the financial statement that you need to check?Income StatementBalance SheetCash Flow StatementStatement of Owner's Equity
- 12. Multiple ChoiceYou want to know how much cash came out from the business to the suppliers. What is the financial statement that you need to check?Income StatementBalance SheetCash Flow StatementStatement of Owner's Equity
- 13. Multiple Choice
Concept: a business's records should never be mixed with an owner's personal records and reports
adequate disclosure
business entity
objective evidence
going concern
- 14. Multiple Choice
Concept: The revenue from business activities and the expenses associated with earning that revenue are recorded in the same accounting period
adequate disclosure
unit of measurement
historical cost
matching expenses with revenue
- 15. Multiple Choice
The Assumption that revenues are recognised when earned and expenses when incurred so profit is calculated as Revenue earnt less expenses incurred is the
Entity assumption
Period assumption
Accrual basis assumption
Going concern assumption
- 16. Multiple Choice
The Assumptions that the business will continue to operate in the future and its records are kept on that basis is the
Entity assumption
Period assumption
Accrual basis assumption
Going concern assumption
- 17. Multiple Choice
According to the FASB conceptual framework, the objectives of financial reporting for business enterprises are based on?
Generally accepted accounting principles
Reporting on management’s stewardship
The need for conservatism
The needs of the users of the information
- 18. Multiple Choice
According to the FASB conceptual framework, an entity’s revenue may result from
A decrease in an asset from primary operations
An increase in an asset from incidental transactions
An increase in a liability from incidental transactions
A decrease in a liability from primary operations
- 19. Multiple Choice
Yahoo, Inc. recognizes depreciation expense for a machine over the 2-year period during which that machine helps the company earn revenue.
Revenue Recognition
Matching
Full Disclosure
Historical Cost
- 20. Multiple Choice
Oracle Corporation reports information about pending lawsuits in the notes to its financial statements.
Revenue Recognition
Matching
Full Disclosure
Historical Cost
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