Lesson 1 exam question 1 5 / 5 points which financial statement
Lesson 1 Exam
Question 1 5 / 5 points
Which financial statement presents the results of operations?
Question options:
Balance sheet
Statement of financial position
Income statement
Statement of cash flows
Question 2 5 / 5 points
Which report is NOT required to be filed by public companies to the SEC?
Question options:
Annual reports (Form 10-K)
Financial Reporting Rulings
A prospectus for any new security offering
Quarterly reports (From 10-Q)
Question 3 5 / 5 points
Why does the management discussion and analysis help the analyst?
Question options:
It contains information that cannot be found in the financial data.
It provides predictions of all future financial statement numbers.
It outlines the accounting choices made by the firm.
It explains the market valuation of the firm’s stock.
Question 4 5 / 5 points
What information can be found on a balance sheet?
Question options:
Information to support that assets equal liabilities
The profit or loss for the accounting period
The reasons for changes in the cash account
The financial position on a particular date; i.e. assets, liabilities and shareholders’ equity
Question 5 5 / 5 points
How are revenues and expenses recognized under the accrual basis of accounting?
Question options:
Revenues are recognized when cash is received and expenses are recognized when cash is paid.
Revenues and expenses are recognized equally over a twelve month period.
Revenues and expenses are recognized based on the choices of management.
Revenues are recognized in the accounting period when the sale is made and expenses are recognized in the period in which they relate to the sale of the product.
Question 6 5 / 5 points
Which of the following is an external source of liquidity?
Question options:
Sales of services
Repurchase of stock
Borrowing
Sales of products
Question 7 5 / 5 points
Which financial statement provides information about operating, financing and investing activities?
Question options:
Statement of financial position
Statement of cash flows
Statement of stockholders’ equity
Income statement
Question 8 5 / 5 points
Which financial statement shows the assets, liabilities and stockholders’ equity of the firm on a particular date?
Question options:
Statement of stockholders’ equity
Statement of cash flows
Earnings statement
Balance sheet
Question 9 5 / 5 points
What does Section 404 of the Sarbanes-Oxley Act of 2002 require?
Question options:
The external auditors must create an adequate internal control structure for the firm being audited.
The external auditors must approve of all internal auditors hired by a firm.
The inclusion of an internal control report in the annual report.
The external auditors need to perform internal audit services.
Question 10 5 / 5 points
What type of audit report indicates that the financial statements have NOT been presented fairly?
Question options:
A disclaimer of opinion
An unqualified report
A qualified report
An adverse opinion
Question 11 5 / 5 points
What organization has the authority to register, inspect, and discipline auditors of all publicly owned companies?
Question options:
Public Company Accounting Oversight Board
SOX
Congress
FASB
Question 12 5 / 5 points
Which of the following is an internal source of liquidity?
Question options:
Borrowing
Sales of stock
Gifts and donations
Sales of products or services
Question 13 5 / 5 points
What type of audit report indicates that the financial statements have been presented fairly?
Question options:
An unqualified report
A disclaimer of opinion
A qualified report
An adverse opinion
Question 14 5 / 5 points
Which agency requires the filing of Form 10-Ks, Form 10-Qs and Form 8-Ks?
Question options:
FASB
IASB
SEC
GAAP
Question 15 5 / 5 points
According to Section 302 of the Sarbanes-Oxley Act, who must certify the accuracy of the financial statements of a public company?
Question options:
Public Company Accounting Oversight Board
SEC
External auditor
CEO and CFO
Question 16 5 / 5 points
The globalization of business activity has resulted in which of the following?
Question options:
Increased corruption and unethical behavior
A uniform set of accounting rules in all countries
The FASB and IASB working jointly on a project to converge accounting standards
The requirement that U.S. firms use international accounting rules as of 2006
Question 17 5 / 5 points
In what industry would it be expected that companies would spend a significant amount on research and development activities?
Question options:
Pharmaceutical
Clothes retailer
Groceries
Wholesale distributor of computer parts
Question 18 5 / 5 points
Which of the following statements is true?
Question options:
Foreign firms registered with the SEC may file reports based on IFRS.
U.S. firms registered with the SEC may file reports based on IFRS.
The European Union requires firms to report based on GAAP.
Foreign firms registered with the SEC may file reports based on IFRS only if they reconcile all amounts to GAAP.
Question 19 5 / 5 points
Which of the following items is a discretionary expenditure?
Question options:
Union wages
Factory building to produce inventory
Advertising
Taxes
Question 20 5 / 5 points
What basic financial statements can be found in a corporate annual report?
Question options:
Balance sheet, income statement, statement of shareholders’ equity, and statement of cash flows
Balance sheet, auditor’s report and income statement
Earnings statement and statement of retained earnings
Statement of cash flows and five-year summary of key financial data
