Question 1

Most companies consolidate the parent's and subsidiary's accounts summed.

Accepted Answer

A) True 
 B)False  True

Question 2

A partnership is a business owned by two or more individuals.Each owner is personally responsible for the debts of the partnership.

Accepted Answer

A) True 
 B)False  True

Question 3

The responsibility for the preparation and integrity of financial statements rests with management.

Accepted Answer

A) True 
 B)False  True

Question 4

A company must have majority voting shares of the other company in order to consolidate.

Accepted Answer

A) True 
 B)False

Question 5

Retained earnings always shows a positive balance.

Accepted Answer

A) True 
 B)False

Question 6

One is unlikely to regard a qualified opinion or an adverse opinion as casting serious doubts on the reliability of the financial statements.

Accepted Answer

A) True 
 B)False

Question 7

The accrual basis needs numerous adjustments at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 8

Accounting for a business combination must be accounted for using the purchase method.

Accepted Answer

A) True 
 B)False

Question 9

The statement of cash flows consists of two sections: cash flows from operating activities and cash flows from financing activities.

Accepted Answer

A) True 
 B)False

Question 10

At any point in time, assets must equal the contribution of the creditors only.

Accepted Answer

A) True 
 B)False

Question 11

Financial statements of legally separate entities may be issued to show financial position, income, and cash flow as they would appear if the companies were a single entity.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a temporary account?

Accepted Answer

A) Advertising expense 
B) Land 
C) Building 
D) Accounts payable 
E) Bonds payable 
A) Advertising expense 
B) Land 
C) Building 
D) Accounts payable 
E) Bonds payable

Question 13

For consolidated statements, all transactions between entities being consolidated (i.e., intercompany transactions) must be eliminated.

Accepted Answer

A) True 
 B)False

Question 14

Which of these statements is not true?

Accepted Answer

A) Asset, liability, and stockholders' equity accounts are referred to as permanent accounts. 
B) Revenue, expense, and dividend accounts are described as temporary accounts. 
C) Temporary accounts are closed at the end of the period to retained earnings. 
D) The balance sheet will not balance until the temporary accounts are closed to retained earnings. 
E) With double-entry, each transaction is recorded twice. 
A) Asset, liability, and stockholders' equity accounts are referred to as permanent accounts. 
B) Revenue, expense, and dividend accounts are described as temporary accounts. 
C) Temporary accounts are closed at the end of the period to retained earnings. 
D) The balance sheet will not balance until the temporary accounts are closed to retained earnings. 
E) With double-entry, each transaction is recorded twice.

Question 15

Which of the following statements is not true?

Accepted Answer

A) A qualified opinion or an adverse opinion may bring into question the reliability of the financial statements. 
B) A disclaimer of opinion indicates that one should not look to the auditor's report as an indication of the reliability of the statements. 
C) In some cases, outside accountants are associated with financial statements when they have performed less than an audit. 
D) A review is substantially less in scope than an examination in accordance with generally accepted auditing statements. 
E) The accountant's report expresses an opinion on reviewed financial statements. 
A) A qualified opinion or an adverse opinion may bring into question the reliability of the financial statements. 
B) A disclaimer of opinion indicates that one should not look to the auditor's report as an indication of the reliability of the statements. 
C) In some cases, outside accountants are associated with financial statements when they have performed less than an audit. 
D) A review is substantially less in scope than an examination in accordance with generally accepted auditing statements. 
E) The accountant's report expresses an opinion on reviewed financial statements.

Question 16

An adverse opinion states that, except for the effects of the matter(s) to which the qualification relates, the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of the entity in conformity with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 17

Several accounts could be involved in a single transaction, but the debits and credits must still be equal.

Accepted Answer

A) True 
 B)False

Question 18

A balance sheet shows the financial condition of an accounting entity for a particular period of time.

Accepted Answer

A) True 
 B)False

Question 19

The auditor will issue a qualified opinion when he/she has not performed an audit sufficient in scope to form an opinion.

Accepted Answer

A) True 
 B)False

Question 20

There are three methods of accounting for a business combination.

Accepted Answer

A) True 
 B)False

Most companies consolidate the parent's and subsidiary's accounts summed.

A partnership is a business owned by two or more individuals.Each owner is personally responsible for the debts of the partnership.

The responsibility for the preparation and integrity of financial statements rests with management.

A company must have majority voting shares of the other company in order to consolidate.

Retained earnings always shows a positive balance.

One is unlikely to regard a qualified opinion or an adverse opinion as casting serious doubts on the reliability of the financial statements.

The accrual basis needs numerous adjustments at the end of the accounting period.

Accounting for a business combination must be accounted for using the purchase method.

The statement of cash flows consists of two sections: cash flows from operating activities and cash flows from financing activities.

At any point in time, assets must equal the contribution of the creditors only.

Financial statements of legally separate entities may be issued to show financial position, income, and cash flow as they would appear if the companies were a single entity.

Which of the following is a temporary account?

For consolidated statements, all transactions between entities being consolidated (i.e., intercompany transactions) must be eliminated.

Which of these statements is not true?

Which of the following statements is not true?

Several accounts could be involved in a single transaction, but the debits and credits must still be equal.

A balance sheet shows the financial condition of an accounting entity for a particular period of time.

The auditor will issue a qualified opinion when he/she has not performed an audit sufficient in scope to form an opinion.

There are three methods of accounting for a business combination.

Introduction to Financial Reporting

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets; Related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Statement of Cash Flows

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters

Exam 2: Introduction to Financial Statements and Other Financial Reporting Topics

Most companies consolidate the parent's and subsidiary's accounts summed.

A partnership is a business owned by two or more individuals.Each owner is personally responsible for the debts of the partnership.

The responsibility for the preparation and integrity of financial statements rests with management.

A company must have majority voting shares of the other company in order to consolidate.

Retained earnings always shows a positive balance.

One is unlikely to regard a qualified opinion or an adverse opinion as casting serious doubts on the reliability of the financial statements.

The accrual basis needs numerous adjustments at the end of the accounting period.

Accounting for a business combination must be accounted for using the purchase method.

The statement of cash flows consists of two sections: cash flows from operating activities and cash flows from financing activities.

At any point in time, assets must equal the contribution of the creditors only.

Financial statements of legally separate entities may be issued to show financial position, income, and cash flow as they would appear if the companies were a single entity.

Which of the following is a temporary account?

For consolidated statements, all transactions between entities being consolidated (i.e., intercompany transactions) must be eliminated.

Which of these statements is not true?

Which of the following statements is not true?

Several accounts could be involved in a single transaction, but the debits and credits must still be equal.

A balance sheet shows the financial condition of an accounting entity for a particular period of time.

The auditor will issue a qualified opinion when he/she has not performed an audit sufficient in scope to form an opinion.

There are three methods of accounting for a business combination.

Introduction to Financial Reporting

Balance Sheet

Income Statement

Basics of Analysis

Liquidity of Short-Term Assets; Related Debt-Paying Ability

Long-Term Debt-Paying Ability

Profitability

For the Investor

Statement of Cash Flows

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters