Question 1

Expenses are ____ in shareholders' equity.

Accepted Answer

A)  Decreases 
B)  Not included 
C)  Increases 
D)  None of these. 
A)  Decreases 
B)  Not included 
C)  Increases 
D)  None of these. A

Question 2

Share capital is the ____ value of the contributions to the firm all shareholders have made in the beginning and during the life of the firm by making external resources available to the firm and giving up control over these resources.

Accepted Answer

A)  Market 
B)  Historical 
C)  Fair 
D)  Adjusted 
A)  Market 
B)  Historical 
C)  Fair 
D)  Adjusted B

Question 3

Net income is generally calculated in a separate and subsidiary account called:

Accepted Answer

A)  A statement of cash flows. 
B)  A statement of retained earnings. 
C)  An income statement. 
D)  A statement of changes in equity. 
A)  A statement of cash flows. 
B)  A statement of retained earnings. 
C)  An income statement. 
D)  A statement of changes in equity. C

Question 4

Common-size analysis focuses on the comparison of financial statements over time (comparison carried line item by line item against the like value in a base-year):

Accepted Answer

A) True 
 B)False

Question 5

The statement of financial position/balance sheet is a set of two lists showing:

Accepted Answer

A)  Resources on one side and obligations to external parties on the other side. 
B)  Revenues on one side and expenses on the other side. 
C)  Profit on one side and loss on the other side. 
D)  None of these. 
A)  Resources on one side and obligations to external parties on the other side. 
B)  Revenues on one side and expenses on the other side. 
C)  Profit on one side and loss on the other side. 
D)  None of these.

Question 6

What is the result of recording a borrowing transaction?

Accepted Answer

A)  An increase in both cash and shareholders' equity. 
B)  An increase in cash and a decrease in liabilities. 
C)  An increase in both cash and liabilities. 
D)  A decrease in cash and an increase in liabilities. 
A)  An increase in both cash and shareholders' equity. 
B)  An increase in cash and a decrease in liabilities. 
C)  An increase in both cash and liabilities. 
D)  A decrease in cash and an increase in liabilities.

Question 7

Which of the following transactions has an impact on the bank's cash balance but not on retained earnings?

Accepted Answer

A)  Purchase of equipment 
B)  Sales of goods 
C)  Payment of wages 
D)  Payment of financial interest 
A)  Purchase of equipment 
B)  Sales of goods 
C)  Payment of wages 
D)  Payment of financial interest

Question 8

The way a claim is settled has an impact on equity.

Accepted Answer

A) True 
 B)False

Question 9

Obligations and resources are listed in:

Accepted Answer

A)  Increasing order of liquidity. 
B)  Either increasing or decreasing order of liquidity. 
C)  Decreasing order of liquidity. 
D)  Alphabetical order. 
A)  Increasing order of liquidity. 
B)  Either increasing or decreasing order of liquidity. 
C)  Decreasing order of liquidity. 
D)  Alphabetical order.

Question 10

Which of the following equations is correct?

Accepted Answer

A)  Revenues - Expenses = Income 
B)  Revenues + Expenses = Income 
C)  Revenues = Expenses = Income 
D)  Revenues = Expenses - Income 
A)  Revenues - Expenses = Income 
B)  Revenues + Expenses = Income 
C)  Revenues = Expenses = Income 
D)  Revenues = Expenses - Income

Question 11

Which financial statement would you use to find out how well the company performed during a given time period?

Accepted Answer

A)  Statement of cash flows 
B)  Income statement 
C)  Statement of financial position/ Balance sheet 
D)  Statement of retained earnings 
A)  Statement of cash flows 
B)  Income statement 
C)  Statement of financial position/ Balance sheet 
D)  Statement of retained earnings

Question 12

Which of the following equations is correct?

Accepted Answer

A)  Consumption of merchandise = Purchases of merchandise + Increase in inventories of merchandise 
B)  Consumption of merchandise - Purchases of merchandise = Increase in inventories of merchandise 
C)  Consumption of merchandise = Purchases of merchandise - Increase in inventories of merchandise 
D)  Consumption of merchandise = Purchases of merchandise = Increase in inventories of merchandise 
A)  Consumption of merchandise = Purchases of merchandise + Increase in inventories of merchandise 
B)  Consumption of merchandise - Purchases of merchandise = Increase in inventories of merchandise 
C)  Consumption of merchandise = Purchases of merchandise - Increase in inventories of merchandise 
D)  Consumption of merchandise = Purchases of merchandise = Increase in inventories of merchandise

Question 13

Revenues are ____ in shareholders' equity.

Accepted Answer

A)  Decreases 
B)  Not included 
C)  Increases 
D)  None of these. 
A)  Decreases 
B)  Not included 
C)  Increases 
D)  None of these.

Question 14

That part of the profit which is not distributed is considered to be:

Accepted Answer

A)  Capital 
B)  Dividends 
C)  Retained earnings 
D)  Income 
A)  Capital 
B)  Dividends 
C)  Retained earnings 
D)  Income

Question 15

Which items are traditionally listed first in North America?

Accepted Answer

A)  Short-term 
B)  Valuable 
C)  Long-term 
D)  None of these. 
A)  Short-term 
B)  Valuable 
C)  Long-term 
D)  None of these.

Question 16

Which financial statement shows the financial picture of the organization on a given day?

Accepted Answer

A)  Income statement 
B)  Statement of financial position/Balance sheet 
C)  Statement of retained earnings 
D)  Statement of cash flows 
A)  Income statement 
B)  Statement of financial position/Balance sheet 
C)  Statement of retained earnings 
D)  Statement of cash flows

Question 17

What is the book value of a 'fully depreciated' asset?

Accepted Answer

A)  Zero 
B)  The amount initially paid to acquire it 
C)  Almost zero 
D)  None of these. 
A)  Zero 
B)  The amount initially paid to acquire it 
C)  Almost zero 
D)  None of these.

Question 18

(Beginning retained earnings balance)+ (Income from the period)- (____)= (Ending retained earnings balance)

Accepted Answer

A)  Expenses 
B)  Dividends 
C)  Revenue 
D)  Interest 
A)  Expenses 
B)  Dividends 
C)  Revenue 
D)  Interest

Question 19

Acquired equipment is valued at its historical cost.

Accepted Answer

A) True 
 B)False

Question 20

Retained earnings represent that part of the firm's value created that:

Accepted Answer

A)  Shareholders have chosen not to take out of the firm. 
B)  Lenders have chosen not to take out of the firm. 
C)  Shareholders have chosen to take out of the firm. 
D)  Lenders have chosen to take out of the firm. 
A)  Shareholders have chosen not to take out of the firm. 
B)  Lenders have chosen not to take out of the firm. 
C)  Shareholders have chosen to take out of the firm. 
D)  Lenders have chosen to take out of the firm.

Expenses are ____ in shareholders' equity.

Share capital is the ____ value of the contributions to the firm all shareholders have made in the beginning and during the life of the firm by making external resources available to the firm and giving up control over these resources.

Net income is generally calculated in a separate and subsidiary account called:

Common-size analysis focuses on the comparison of financial statements over time (comparison carried line item by line item against the like value in a base-year):

The statement of financial position/balance sheet is a set of two lists showing:

What is the result of recording a borrowing transaction?

Which of the following transactions has an impact on the bank's cash balance but not on retained earnings?

The way a claim is settled has an impact on equity.

Obligations and resources are listed in:

Which of the following equations is correct?

Which financial statement would you use to find out how well the company performed during a given time period?

Which of the following equations is correct?

Revenues are ____ in shareholders' equity.

That part of the profit which is not distributed is considered to be:

Which items are traditionally listed first in North America?

Which financial statement shows the financial picture of the organization on a given day?

What is the book value of a 'fully depreciated' asset?

(Beginning retained earnings balance)+ (Income from the period)- (____)= (Ending retained earnings balance)

Acquired equipment is valued at its historical cost.

Retained earnings represent that part of the firm's value created that:

Accounting: the Language of Business

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters

Exam 2: Introduction to Financial Statements

Expenses are ____ in shareholders' equity.

Share capital is the ____ value of the contributions to the firm all shareholders have made in the beginning and during the life of the firm by making external resources available to the firm and giving up control over these resources.

Net income is generally calculated in a separate and subsidiary account called:

Common-size analysis focuses on the comparison of financial statements over time (comparison carried line item by line item against the like value in a base-year):

The statement of financial position/balance sheet is a set of two lists showing:

What is the result of recording a borrowing transaction?

Which of the following transactions has an impact on the bank's cash balance but not on retained earnings?

The way a claim is settled has an impact on equity.

Obligations and resources are listed in:

Which of the following equations is correct?

Which financial statement would you use to find out how well the company performed during a given time period?

Which of the following equations is correct?

Revenues are ____ in shareholders' equity.

That part of the profit which is not distributed is considered to be:

Which items are traditionally listed first in North America?

Which financial statement shows the financial picture of the organization on a given day?

What is the book value of a 'fully depreciated' asset?

(Beginning retained earnings balance)+ (Income from the period)- (____)= (Ending retained earnings balance)

Acquired equipment is valued at its historical cost.

Retained earnings represent that part of the firm's value created that:

Accounting: the Language of Business

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters