1.

Which accounting method will result in financial statements that report a

more complete picture of a corporation’s financial position and a better
measure of profitability during a recent accounting year?

Accrual Method

Cash Method

2. Which type of journal entries are made at the end of each accounting
period so that the financial statements better reflect the accrual method
of accounting?

Adjusting

Closing

Reversing

3. The generally accepted accounting principles used in the financial

statements of U.S corporations are researched and developed by which
organization?

American Accounting Association (AAA)

Financial Accounting Standards Board (FASB)

Internal Revenue Service (IRS)

4. Which financial statement will allow you to determine the gross margin for
a retailer or manufacturer?

Balance Sheet

Income Statement

Statement Of Cash Flows

Statement Of Comprehensive Income

Statement Of Stockholders’ Equity

5. Does the heading of a balance sheet indicate a period of time or a point in

time?

Period Of Time
 Point In Time

6. A corporation's net income will cause a change in which component of

stockholders' equity?

Accumulated Other Comprehensive Income

Paid-in Capital

Retained Earnings
7. Which financial statement's structure is closest to that of the basic
accounting equation?

Balance Sheet

Income Statement

Statement Of Cash Flows

Statement Of Comprehensive Income

Statement Of Stockholders’ Equity

8. Is it true or false that a grocery store’s sale of its old delivery van to one of
its employees for $2,000 should be recorded in the general ledger
account Sales?

True

False

9. Is it true or false that the total amount of stockholders’ equity reported on

the balance sheet is intended to show the fair market value of the
corporation?

True

False

10.Comprehensive income is defined as _______________ plus other comprehensive

income.

Extraordinary Items

Gains And Losses

 Net Income

11.Which financial statement reports the adjustments for foreign currency

translation?

Statement Of Cash Flows

Statement Of Comprehensive Income

Statement Of Income

12.Ten years ago, a corporation started a new brand name that is now
considered to be its most valuable asset. On which financial statement
and at what amount will you see the brand name reported?

Balance Sheet At Its Present Value

Statement Of Comprehensive Income With No Value

Not Reported On A Financial Statement

13.A corporation's working capital is calculated using which amounts?

Total Assets and Total Liabilities

Total Assets and Current Liabilities

Current Assets and Current Liabilities

14.The changes that occurred during a recent year in the accounts Retained
Earnings and Treasury Stock will be found in which financial statement?

Balance Sheet

Income Statement

Statement Of Cash Flows

Statement Of Comprehensive Income

Statement Of Stockholders’ Equity

15.The amount spent for capital expenditures will be reported in which section of
the statement of cash flows?

Cash Provided/used In Financing Activities

 Cash Provided/used In Investing Activities

Cash Provided/used In Operating Activities

Supplemental Information

16.Which of the following will appear as a negative amount on a statement of

cash flows that was prepared using the indirect method?

A Decrease In Inventory

An Increase In Accounts Payable

An Increase In Accounts Receivable

Depreciation Expense

17.Which of the following will appear as a positive amount on a statement of

cash flows that was prepared using the indirect method?

An Increase In Accounts Receivable

An Increase In Inventory

A Decrease In Accounts Payable

Depreciation Expense
18.What is usually presented first in the notes to the financial statements?

Accumulated Other Comprehensive Income

Commitments And Contingencies

Significant Accounting Policies

19.Which is the annual report to the SEC that contains the financial
statements of a publicly-traded corporation?

Form 1040

Form 10-K

Form 10-Q

Schedule C
20.Important disclosures regarding likely losses that could not be estimated
are found where?

General Ledger Accounts

Income Statement

Notes To The Financial Statements