Question 1

The decision regarding what to do with profit of the period consists in:

Accepted Answer

A)  Distributing the profit entirely to the shareholders as dividends. 
B)  Not distributing profit at all,and the shareholders reinvest their claim in its entirety in the business. 
C)  Distributing the profit partially to the shareholders as dividends,and the balance is considered to be an increase of the investment of the shareholders in the proportion of their previous contributions. 
D)  Choosing among any of the previous possibilities. 
A)  Distributing the profit entirely to the shareholders as dividends. 
B)  Not distributing profit at all,and the shareholders reinvest their claim in its entirety in the business. 
C)  Distributing the profit partially to the shareholders as dividends,and the balance is considered to be an increase of the investment of the shareholders in the proportion of their previous contributions. 
D)  Choosing among any of the previous possibilities.

Question 2

Which items are traditionally listed first in Continental Europe?

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 3

Shareholders' equity is made up of which two components?

Accepted Answer

A)  Share capital and expenses 
B)  Expenses and revenues 
C)  Share capital and retained earnings 
D)  Expenses and retained earnings 
A)  Share capital and expenses 
B)  Expenses and revenues 
C)  Share capital and retained earnings 
D)  Expenses and retained earnings

Question 4

Which of the following cannot be stored?

Accepted Answer

A)  Merchandises 
B)  Finished products 
C)  Raw materials 
D)  Services 
A)  Merchandises 
B)  Finished products 
C)  Raw materials 
D)  Services

Question 5

What is the result of recording the acquisition of equipment?

Accepted Answer

A)  An increase in both cash and fixed assets. 
B)  An increase in fixed assets and a decrease in cash. 
C)  An increase in both cash and liabilities. 
D)  An increase in cash and a decrease in fixed assets. 
A)  An increase in both cash and fixed assets. 
B)  An increase in fixed assets and a decrease in cash. 
C)  An increase in both cash and liabilities. 
D)  An increase in cash and a decrease in fixed assets.

Question 6

What is the ratio (Cash + Marketable securities)/Current liabilities called?

Accepted Answer

A)  Return on assets 
B)  Return on investment 
C)  Current ratio 
D)  Cash ratio 
A)  Return on assets 
B)  Return on investment 
C)  Current ratio 
D)  Cash ratio

Question 7

Which of the following is a result of revenues being greater than expenses?

Accepted Answer

A)  A loss. 
B)  A sale. 
C)  A profit. 
D)  A dividend. 
A)  A loss. 
B)  A sale. 
C)  A profit. 
D)  A dividend.

Question 8

A liability is a past obligation of the entity arising from present events,the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following sections form the statement of financial position/balance sheet?

Accepted Answer

A)  Assets,liabilities and profit 
B)  Assets,liabilities and shareholders' equity 
C)  Assets and profit 
D)  Liabilities and profit 
A)  Assets,liabilities and profit 
B)  Assets,liabilities and shareholders' equity 
C)  Assets and profit 
D)  Liabilities and profit

Question 10

It is common for the cash balance and profit to be the same.

Accepted Answer

A) True 
 B)False

Question 11

An asset is a resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity.

Accepted Answer

A) True 
 B)False

Question 12

Current assets are acquired and consumed during the operating cycle or the accounting period.

Accepted Answer

A) True 
 B)False

Question 13

How is the return on sales (net profit margin)calculated?

Accepted Answer

A)  Net income/Shareholders' equity 
B)  Net income/Sales 
C)  Net income/Total assets 
D)  Sales/Shareholders' equity 
A)  Net income/Shareholders' equity 
B)  Net income/Sales 
C)  Net income/Total assets 
D)  Sales/Shareholders' equity

Question 14

Which of the following equations is correct?

Accepted Answer

A)  Net income = Shareholders' equity at the end of period t + Shareholders' equity at the beginning of period t (all other things being equal) 
B)  Net income = Shareholders' equity at the end of period t+1 + Shareholders' equity at the beginning of period t (all other things being equal) 
C)  Net income = Shareholders' equity at the end of period t - Shareholders' equity at the beginning of period t-1 (all other things being equal) 
D)  Net income = Shareholders' equity at the end of period t - Shareholders' equity at the beginning of period t (all other things being equal) 
A)  Net income = Shareholders' equity at the end of period t + Shareholders' equity at the beginning of period t (all other things being equal) 
B)  Net income = Shareholders' equity at the end of period t+1 + Shareholders' equity at the beginning of period t (all other things being equal) 
C)  Net income = Shareholders' equity at the end of period t - Shareholders' equity at the beginning of period t-1 (all other things being equal) 
D)  Net income = Shareholders' equity at the end of period t - Shareholders' equity at the beginning of period t (all other things being equal)

The decision regarding what to do with profit of the period consists in:

Which items are traditionally listed first in Continental Europe?

Shareholders' equity is made up of which two components?

Which of the following cannot be stored?

What is the result of recording the acquisition of equipment?

What is the ratio (Cash + Marketable securities)/Current liabilities called?

Which of the following is a result of revenues being greater than expenses?

A liability is a past obligation of the entity arising from present events,the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

Which of the following sections form the statement of financial position/balance sheet?

It is common for the cash balance and profit to be the same.

An asset is a resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity.

Current assets are acquired and consumed during the operating cycle or the accounting period.

How is the return on sales (net profit margin)calculated?

Which of the following equations is correct?

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

The decision regarding what to do with profit of the period consists in:

Which items are traditionally listed first in Continental Europe?

Shareholders' equity is made up of which two components?

Which of the following cannot be stored?

What is the result of recording the acquisition of equipment?

What is the ratio (Cash + Marketable securities)/Current liabilities called?

Which of the following is a result of revenues being greater than expenses?

A liability is a past obligation of the entity arising from present events,the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

Which of the following sections form the statement of financial position/balance sheet?

It is common for the cash balance and profit to be the same.

An asset is a resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity.

Current assets are acquired and consumed during the operating cycle or the accounting period.

How is the return on sales (net profit margin)calculated?

Which of the following equations is correct?

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