Question 1

Which of the following statements is not correct concerning summary annual reports?

Accepted Answer

A) A summary annual report omits much of the financial information included in an annual report. 
B) When a company issues a summary annual report, the proxy materials it sends to shareholders must include a set of fully audited statements and other required financial disclosures. 
C) A summary annual report generally has more nonfinancial pages than financial pages. 
D) A summary annual report is adequate for reasonable analysis. 
E) The concept of a summary annual report was approved by the Securities and Exchange Commission. 
A) A summary annual report omits much of the financial information included in an annual report. 
B) When a company issues a summary annual report, the proxy materials it sends to shareholders must include a set of fully audited statements and other required financial disclosures. 
C) A summary annual report generally has more nonfinancial pages than financial pages. 
D) A summary annual report is adequate for reasonable analysis. 
E) The concept of a summary annual report was approved by the Securities and Exchange Commission.

Question 2

The retained earnings account is the link between the balance sheet and the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 3

For public companies reporting to the SEC, the 10-K, 10-Q, 8-K, and proxy can be found at http://www.sec.gov.

Accepted Answer

A) True 
 B)False

Question 4

From the point of view of analysis, the unqualified opinion without an explanatory paragraph or explanatory language carries the highest degree of reliability.

Accepted Answer

A) True 
 B)False

Question 5

The financial statements of the parent and the subsidiary are consolidated for all subsidiaries unless control is temporary or does not rest with the majority.

Accepted Answer

A) True 
 B)False

Question 6

A summary annual report generally has more nonfinancial pages than financial pages.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a type of audit opinion that a firm would usually prefer?

Accepted Answer

A) Uqualified opinion 
B) Qualified opinion 
C) Adverse opinion 
D) Clear opinion 
E) None of the answers are correct. 
A) Uqualified opinion 
B) Qualified opinion 
C) Adverse opinion 
D) Clear opinion 
E) None of the answers are correct.

Question 8

Sometimes financial statements are presented without an accompanying accountant's report.

Accepted Answer

A) True 
 B)False

Question 9

Smith Company had retained earnings of $60,000 at the end of the current year.For the current year, income was $30,000 and dividends $10,000.What was the balance in retained earnings at the end of the prior year?

Accepted Answer

A) $30,000 
B) $40,000 
C) $60,000 
D) $30,000. 
E) $70,000 
A) $30,000 
B) $40,000 
C) $60,000 
D) $30,000. 
E) $70,000

Question 10

A disclaimer of opinion is necessary when the exceptions to fair presentation are so material that a qualified opinion is not justified.

Accepted Answer

A) True 
 B)False

Question 11

Ethics can be a particular problem with financial reports.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a type of audit opinion?

Accepted Answer

A) Unqualified opinion 
B) Qualified opinion 
C) Adverse opinion 
D) Clean opinion 
E) Disclaimer of opinion 
A) Unqualified opinion 
B) Qualified opinion 
C) Adverse opinion 
D) Clean opinion 
E) Disclaimer of opinion

Question 13

The accountant's report expresses an opinion on reviewed financial statements.

Accepted Answer

A) True 
 B)False

Question 14

A review has substantially less scope than an examination in accordance with generally accepted auditing standards.

Accepted Answer

A) True 
 B)False

Question 15

The efficient market hypothesis (EMH) relates to the ability of capital markets to generate prices for securities that reflect worth.

Accepted Answer

A) True 
 B)False

Question 16

When a subsidiary is not consolidated, it is accounted for as an investment on the parent's balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

The market will not be efficient if it does not have access to relevant information or if fraudulent information is provided.

Accepted Answer

A) True 
 B)False

Question 18

After posting, the general ledger accounts contain the same information as in the journals, but the information has been summarized by account.

Accepted Answer

A) True 
 B)False

Question 19

The assets for the balance sheet must equal the liabilities and stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 20

Which of these statements is not true?

Accepted Answer

A) Transactions must be recorded in a journal. 
B) All transactions could be recorded in the general journal. 
C) Companies use a number of special journals to record most transactions. 
D) Special journals are designed to improve record- keeping efficiency. 
E) The form of the journals are the same from industry to industry. 
A) Transactions must be recorded in a journal. 
B) All transactions could be recorded in the general journal. 
C) Companies use a number of special journals to record most transactions. 
D) Special journals are designed to improve record- keeping efficiency. 
E) The form of the journals are the same from industry to industry.

Which of the following statements is not correct concerning summary annual reports?

The retained earnings account is the link between the balance sheet and the statement of cash flows.

For public companies reporting to the SEC, the 10-K, 10-Q, 8-K, and proxy can be found at http://www.sec.gov.

From the point of view of analysis, the unqualified opinion without an explanatory paragraph or explanatory language carries the highest degree of reliability.

The financial statements of the parent and the subsidiary are consolidated for all subsidiaries unless control is temporary or does not rest with the majority.

A summary annual report generally has more nonfinancial pages than financial pages.

Which of the following is a type of audit opinion that a firm would usually prefer?

Sometimes financial statements are presented without an accompanying accountant's report.

Smith Company had retained earnings of $60,000 at the end of the current year.For the current year, income was $30,000 and dividends $10,000.What was the balance in retained earnings at the end of the prior year?

A disclaimer of opinion is necessary when the exceptions to fair presentation are so material that a qualified opinion is not justified.

Ethics can be a particular problem with financial reports.

Which of the following is not a type of audit opinion?

The accountant's report expresses an opinion on reviewed financial statements.

A review has substantially less scope than an examination in accordance with generally accepted auditing standards.

The efficient market hypothesis (EMH) relates to the ability of capital markets to generate prices for securities that reflect worth.

When a subsidiary is not consolidated, it is accounted for as an investment on the parent's balance sheet.

The market will not be efficient if it does not have access to relevant information or if fraudulent information is provided.

After posting, the general ledger accounts contain the same information as in the journals, but the information has been summarized by account.

The assets for the balance sheet must equal the liabilities and stockholders' equity.

Which of these statements is not true?

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

Which of the following statements is not correct concerning summary annual reports?

The retained earnings account is the link between the balance sheet and the statement of cash flows.

For public companies reporting to the SEC, the 10-K, 10-Q, 8-K, and proxy can be found at http://www.sec.gov.

From the point of view of analysis, the unqualified opinion without an explanatory paragraph or explanatory language carries the highest degree of reliability.

The financial statements of the parent and the subsidiary are consolidated for all subsidiaries unless control is temporary or does not rest with the majority.

A summary annual report generally has more nonfinancial pages than financial pages.

Which of the following is a type of audit opinion that a firm would usually prefer?

Sometimes financial statements are presented without an accompanying accountant's report.

Smith Company had retained earnings of $60,000 at the end of the current year.For the current year, income was $30,000 and dividends $10,000.What was the balance in retained earnings at the end of the prior year?

A disclaimer of opinion is necessary when the exceptions to fair presentation are so material that a qualified opinion is not justified.

Ethics can be a particular problem with financial reports.

Which of the following is not a type of audit opinion?

The accountant's report expresses an opinion on reviewed financial statements.

A review has substantially less scope than an examination in accordance with generally accepted auditing standards.

The efficient market hypothesis (EMH) relates to the ability of capital markets to generate prices for securities that reflect worth.

When a subsidiary is not consolidated, it is accounted for as an investment on the parent's balance sheet.

The market will not be efficient if it does not have access to relevant information or if fraudulent information is provided.

After posting, the general ledger accounts contain the same information as in the journals, but the information has been summarized by account.

The assets for the balance sheet must equal the liabilities and stockholders' equity.

Which of these statements is not true?

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