Major Components Of Financial Reporting F1

20 Questions | Total Attempts: 224

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Major Components Of Financial Reporting F1 - Quiz

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Questions and Answers
  • 1. 
    The two major components of financial reporting are the:
    • A. 

      Annual report and Form 10-K

    • B. 

      Balance sheet and Form 10-K

    • C. 

      Income statement and Form S-K

    • D. 

      Annual report and Form S-K

  • 2. 
    The report, prepared from financial information, which uses the equation “revenue less expenses equals net income” is called the:
    • A. 

      Statement of financial position

    • B. 

      Income statement

    • C. 

      Balance sheet

    • D. 

      Statement of cash flows

  • 3. 
    There are several reports prepared from financial accounting information. The report that focuses on the present condition of a business and is based on the model that states “assets must equal liabilities plus owners’ equity” is called the:
    • A. 

      Statement of owners’ equity

    • B. 

      Statement of cash flows

    • C. 

      Income statement

    • D. 

      Balance sheet

  • 4. 
    The mental and physical efforts of people who are involved in running a business are also referred to as:
    • A. 

      Labor

    • B. 

      Capitalism

    • C. 

      Capital

    • D. 

      Communism

  • 5. 
    Most countries’ economic health depends on the importing and exporting of goods. However, such commerce among countries can cause:
    • A. 

      An economic complication such as the use of different currencies among nations

    • B. 

      A political complication such as a country wishing to protect its own self-interests

    • C. 

      An economic complication such as countries with different types of economies

    • D. 

      All of the answers above are correct.

  • 6. 
    A document issued by the FASB that defines the problem, explains issues, and offers several alternatives is a(n):
    • A. 

      New standard

    • B. 

      Task force

    • C. 

      Exposure draft

    • D. 

      Discussion memorandum

  • 7. 
    To be truly useful to decision-makers, financial statements must be analyzed. Many financial statement users consider the relationship between assets and liabilities on the balance sheet to be extremely important. This relationship is known as the:
    • A. 

      Debt ratio

    • B. 

      Asset-to-liability ratio

    • C. 

      Financial position ratio

    • D. 

      None of these answers are correct.

  • 8. 
    When compared to a sole proprietorship, partners in a partnership are at a disadvantage because the partners have:
    • A. 

      More management expertise

    • B. 

      To share in the profits

    • C. 

      Fewer government regulations

    • D. 

      No special income taxes to pay

  • 9. 
    In which respect is a limited partner in a limited partnership "limited"?
    • A. 

      They are limited to corporations

    • B. 

      They are subject to double taxation

    • C. 

      They have limited liability

    • D. 

      They are not permitted to share company profits

  • 10. 
    One challenge a company faces today is determining exactly who its stakeholders are and what responsibility it has to them. The stakeholders of a company include:
    • A. 

      The community at large

    • B. 

      Investors

    • C. 

      Employees

    • D. 

      All of the answers above are correct

  • 11. 
    The financial information report that uses the company's net income as one amount in an equation to arrive at the ending amount is knows as:
    • A. 

      Income statement

    • B. 

      Statement of owners' equity

    • C. 

      Statement of cash flows

    • D. 

      Balance sheet

  • 12. 
    An item that is optional, but often included in the annual report, is the:
    • A. 

      Independent auditors' report

    • B. 

      Management Discussions and Analysis

    • C. 

      Letters to Stockholders

    • D. 

      Consolidated Balance Sheet

  • 13. 
    A business owner has only limited access to capital to operate and expand his or her business. This disadvantage is a characteristic of the business form known as a:
    • A. 

      Sole proprietorship

    • B. 

      Limited partnership

    • C. 

      Partnership

    • D. 

      Corporation

  • 14. 
    Which of the following items is optional when included in an annual report?
    • A. 

      Consolidated Statement of Cash Flows

    • B. 

      Managements Discussion and Analysis

    • C. 

      Key Financial Statistics

    • D. 

      Independent Auditors' Report

  • 15. 
    A person who is willing to accept the opportunities and risks of starting a business is a(n):
    • A. 

      Independent contractor

    • B. 

      Outside board member

    • C. 

      Entrepreneur

    • D. 

      Employee

  • 16. 
    When the auditor states an exception to the audit report, he/she issues a(n):
    • A. 

      Adverse opinion

    • B. 

      Unqualified opinion

    • C. 

      Qualified opinion

    • D. 

      Disclaimer

  • 17. 
    Many companies today are committed to responsible and ethical business practices, and they make it a point of communicating that commitment to investors, employees, and the general public. Anyone to whom the company owes a responsibility is called a(n):
    • A. 

      Corporate officer

    • B. 

      Investor

    • C. 

      Stakeholder

    • D. 

      Competitor

  • 18. 
    A form of business that allows the individual to take risks and reap the rewards of ownership and any profitability is known as a:
    • A. 

      Sole proprietorship

    • B. 

      Limited partnership

    • C. 

      Partnership

    • D. 

      Corporation

  • 19. 
    ________ is (are) the things of value a company owns or controls, and __________ represent(s) the debts or obligations of the company.
    • A. 

      Assets; liabilities

    • B. 

      Assets; owners’ equity

    • C. 

      Liabilities; assets

    • D. 

      Owners’ equity; liabilities

  • 20. 
    Jasmine sells flowers for $25 per bunch. The flowers cost Jasmine $14 per bunch. The delivery driver charges $5 per delivery and the clerk is paid $2 for each order processed. If Jasmine sells 8 bunches of flowers, what is the net income that she'll receive?
    • A. 

      $28

    • B. 

      $32

    • C. 

      $4

    • D. 

      $11

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