Chapter Twelve: Corporations & Their Financial Statements

56 Questions | By Smzachary | Updated: Mar 22, 2022 | Attempts: 115

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Chapter Twelve: Corporations & Their Financial Statements - Quiz

Questions and Answers

1.

LOS Question:Describe the structure of the earnings statement and explain the sources of net income(or net earnings).
2.

LOS Question:Describe the components of the cash flow statement and classify an accounting activity oritem as a cash flow from operating, financing or investing activities.
3.

LOS Question:Explain the importance of the notes to the financial statements and the auditor’s report.
4.

I’VE SEEN VARIOUS FORMS OF THE BASIC ACCOUNTING EQUATION. WHICHEQUATION IS CORRECT?
5.

HOW DOES A BALANCE SHEET BALANCE WHEN A COMPANY FIRST STARTSOUT?
6.

WHAT DOES “CONSOLIDATED” MEAN WHEN WE ARE TALKING ABOUTCONSOLIDATED FINANCIAL STATEMENTS?
7.

WHAT ARE THE JOURNAL ENTRIES FOR DIVIDENDS DECLARED AND FOR NEWBOND ISSUES?
8.

HOW DOES A COMPANY ESTABLISH THE VALUE OF GOODWILL?
9.

CAN YOU PLEASE GIVE ME AN EXAMPLE OF AN INTANGIBLE ASSET WITH AFINITE LIFE
10.

CAN A COMPANY WRITE OFF GOODWILL?
11.

WHAT IS THE NET ASSET VALUE OF A COMPANY? IS IT RELATED TO BOOKVALUE?
12.

HOW COME ISSUED SHARES ARE NOT MENTIONED ON THE BALANCE SHEET?
13.

CAN YOU PLEASE EXPLAIN THE DIFFERENCE BETWEEN FIFO AND LIFO WITHAN EXAMPLE?
14.

CAN YOU PLEASE EXPLAIN HOW CAPITALIZING A LEASE WORKS?
15.

WHAT IS THE PURPOSE OF CAPITALIZING ITEMS ON THE BALANCE SHEET?
16.

HOW IS THE DECISION REACHED TO CAPITALIZE AN ITEM ON THE BALANCESHEET?
17.

DOES ACCUMULATED APPRECIATION ON THE BALANCE SHEET MEAN THATTHE COMPANY HAS EXTRA CASH AVAILABLE?
18.

CAN YOU DISTINGUISH BETWEEN AMORTIZATION, DEPRECIATION ANDDEPLETION? THEY ALL SEEM TO BE THE SAME THING.
19.

WHAT IS A SINKING FUND?
20.

COULD YOU PLEASE EXPLAIN WHY ACCOUNTING PRINCIPLES WOULD DIFFERFROM GOVERNMENT TAXATION PRINCIPLES?
21.

CAN YOU EXPLAIN WHY FUTURE TAXES WOULD SOMETIMES BE RECORDEDAS AN ASSET AND SOMETIMES AS A LIABILITY?
22.

HOW COME THE TAXES A COMPANY HAS TO PAY TO THE GOVERNMENT MAYNOT BE THE SAME AS THEY SHOW ON THEIR FINANCIAL STATEMENTS?
23.

WHAT SHOULD I REMEMBER REGARDING PERMANENT AND TEMPORARYDIFFERENCES BETWEEN TAX PROVISIONS AND ACTUAL TAX PAYABLE?
24.

CAN YOU EXPLAIN WHAT HAPPENS ON THE FINANCIAL STATEMENTS WHEN ABOND IS SOLD AT A PRICE HIGHER THAN PAR?
25.

WHAT ARE THE COSTS ASSOCIATED WITH ISSUING A BOND?