Quiz Detail

Q1 . Which of the following best describes an balance sheet?

A It reports cash receipts and cash disbursements for a specific accounting period

B It reports investment activities for a specified accounting period

C It reports the amount and composition of assets and liabilities for a specific accounting period

Q2 . Which of the following would be classified a cash inflow from investing activities?

A Cash paid to retire bonds

B Cash paid for dividends

C Proceeds from selling investments in the equity securities of other companies

Q3 . A firm is purchased for more than the fair market value of its assets. The excess is:

A Written off against the retained earnings on the balance sheet

B Treated as an extraordinary loss & presented net of taxes on the income statement

C Considered as "goodwill"

Q4 . Which of the following is not a current asset?

A Accumulated Depreciation

B Accounts Receivable

C Notes Receivable

Q5 . Which of the following best describes an income statement?

A An income statement reports changes over a period of time in component accounts that comprise the ownership of a firm

B An income statement summarizes the financial position of a company at a given point in time

C An income statement measures a company's financial performance over a specified period of time

Q6 . A firm has a net income of 200, an increase in accounts receivables of 30, depreciation of 55 and a decrease in accounts payable of 25. Its operating cash flow is ________.

A 200

B 230

C 285

Q7 . Cash outflows for payment of cash dividends is an example of:

A Cash flows from operating activities

B Cash flows from financing activities

C Cash flows from investing activities

Q8 . Which of the following would be classified a cash inflow from investing activities? I. Proceeds from selling investments in the debt securities of other entities, except cash equivalents II. Proceeds from collecting the principal amount of loans III. Proceeds from selling investments in the equity securities of other companies

A Only I is correct

B I and II are correct

C All responses are correct

Q9 . Companies report accounts receivable at:

A Their net realizable value

B Their liquidation value

C The lower-of-cost-or-market value

Q10 . If an auditor issues an "adverse opinion" qualification in her opinion, she is referring to the fact that:

A The firm's financial statements do not fairly represent the company's financial performance and position

B There is considerable uncertainty in the firm's asset-liability valuation, thus causing a concern about its operational health

C The firm has inadequate controls in place and needs an on-going, frequent audit

Q11 . Which of the following would be considered a liability that arises from financing activities?

A Accounts payable

B Notes payable

C Taxes payable

Q12 . The opinion paragraph of an independent auditor's report begins, "In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position..." This language states ________.

A An unqualified opinion

B A disclaimer of opinion

C A qualified opinion

Q13 . The following asset is subject to the least amount of depreciation or amortization during its useful life:

A Land

B Warehouse

C Patents

Q14 . Basic earnings per share is calculated as:

A [Net Income- Dividends]/Weighted Avg # of shares outstanding

B [Net Income-Preferred Dividends]/Weighted Avg # of common shares outstanding

C [Net Income]/[Common shares outstanding]

Q15 . Retained earnings represent:

A Undistributed net income in the last accounting period

B Accumulated, undistributed earnings since inception

C Earnings inclusive of any paid-in capital since inception

Q16 . Stock dividends and stock splits differ in that

A Stock splits are paid in additional shares of common stock, whereas a stock dividend results in replacement of all outstanding shares with a new issue of shares

B A stock dividend results in a decline in the par value per share

C In a stock split a larger number of new shares replaces the outstanding shares

Q17 . Firm A capitalized an expense and an otherwise identical Firm B expensed it. Then,

A A shows higher operating cash flow and investing cash flow

B A shows higher operating cash flow and lower investing cash flow

C A shows lower operating cash flow and investing cash flow

Q18 . As a general rule, revenue is normally recognized when it is ________.

A Measurable and received

B Measurable and earned

C Realizable and earned

Q19 . Which of the following are operating cash flows? I. Interest received II. Interest paid III. Dividends received IV. Dividends paid

A I, II, III & IV

B I & III

C I, II & III

Q20 . Under the treasury stock method, primary earnings per share data are computed as if options and warrants (outstanding for the entire year) were exercised at the

A Beginning of the period and as if the funds obtained thereby were used to purchase common stock at the current market price in effect at the end of the period

B End of the period and as if the funds obtained thereby were used to purchase common stock at the current market price in effect at the end of the period

C Beginning of the period and as if the funds obtained thereby were used to purchase common stock at the average market price during the period

Q21 . Which of the following best describes an balance sheet?