Financial Statements MCQs

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Notes to financial statements are beneficial in meeting the disclosure requirements of financial reporting. The notes should not be used to






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The management of ABC Corporation is analyzing the financial statements of XYZ Corporation because ABC is strongly considering purchasing a block of...






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An entity that sprays chemicals in residences to eliminate or prevent infestation of insects requires that customers prepay for 3 months service at ...






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The financial statements included in the annual report to the shareholders are least useful to which one of the following?






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Prepaid expenses are valued on the statement of financial position at the






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Dixon Company has the following items recorded on its financial records: Available-for-sale securities .............$200,000 Prepaid expenses..........






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Long-term obligations that are or will become callable by the creditor because of the debtors violation of a provision of the debt agreement at the...






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Abernathy Corporation uses a calendar year for financial and tax reporting purposes and has $100 million of mortgage bonds due on January 15, Year 2...






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A cable television entity receives deposits from customers that are refunded when service is terminated. The average customer stays with the entity ...






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A company has outstanding accounts payable of $30,000 and a short-term construction loan in the amount of $100,000 at year end. The loan was refinan...






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Rice Co. was incorporated on January 1, Year 6, with $500,000 from the issuance of stock and borrowed funds of $75,000. During the first year of ope...






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Careful reading of an annual report will reveal that off-balance-sheet debt includes






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Which one of the following is not a form of off-balance-sheet financing?






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A primary objective of external financial reporting is






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Which of the following is true regarding the comparison of managerial and financial accounting?






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The primary purpose of the statement of financial position is to reflect






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A receivable classified as current on the statement of financial position is expected to be collected within






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The major segments of the statement of retained earnings for a period are






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In recording transactions, which of the following best describes the relation between expenses and losses?






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An entity had the following opening and closing inventory balances during the current year: ................................1/1............ ...






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The profit and loss statement of Madengrad Mining includes the following information for the current fiscal year: Sales.................................






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If the beginning balance for May of the materials inventory account was $27,500, the ending balance for May is $28,750, and $128,900 of materials were...






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Given the following data for Scurry Company, what is the cost of goods sold? Beginning inventory of finished goods.. $100,000 Cost of goods manufa...






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The following information was taken from last year’s accounting records of a manufacturing company. Inventory.......................January 1.........






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The financial statement that provides a summary of the firms operations for a period of time is the






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The following information pertains to Maynard Corporations income statement for the 12 months just ended. The company has an effective income tax rat...






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Items reported as prior-period adjustments






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An appropriation of retained earnings by the board of directors of a corporation for bonded indebtedness will result in






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The statement of shareholders equity shows a






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Unless the shares are specifically restricted, a holder of common stock with a preemptive right may share proportionately in all of the following exce...






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Which one of the following statements is correct regarding the effect preferred stock has on a company?






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A retained earnings appropriation can be used to






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Which one of the following statements regarding treasury stock is correct?






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Tyler Corporation purchased 10,000 shares of its own $5 par-value common stock for $25 per share. This stock originally sold for $28 per share. Tyler ...






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A statement of cash flows is intended to help users of financial statements






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On February 1, Year 1, a computer software firm agrees to program a software package. Twelve payments of $10,000 on the first of each month are to be ...






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For financial statement purposes, the installment method of accounting may be used if the






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Several of Fox, Inc.s customers are having cash flow problems. Information pertaining to these customers for the years ended March 31, Year 7 and Yea...






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How should the balances of progress billings and construction in progress be shown at reporting dates prior to the completion of a long-term contract?






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During Year 1, Tidal Co. began construction on a project scheduled for completion in Year 3. At December 31, Year 1, an overall loss was anticipated a...






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The measurement basis most often used to report a long-term payable representing a commitment to pay money at a determinable future date is






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Johnson Company uses the allowance method to account for uncollectible accounts receivable. After recording the estimate of uncollectible accounts ex...






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A shoe retailer allows customers to return shoes within 90 days of purchase. The company estimates that 5% of sales will be returned within the 90-da...






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Unrealized gains and losses on trading securities should be presented in the






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A corporation entered into a purchase commitment to buy inventory. At the end of the accounting period, the current market value of the inventory was ...






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Which one of the following statements is correct about the reconciliation of U.S. GAAP and International Financial Reporting Standards (IFRS)?






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Income-tax-basis financial statements differ from those prepared under GAAP because they






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Selected financial information for Windham, Inc., for the year just ended is shown below. Pretax income $5,000,000 Intere...






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Cali, Inc. had a $4,000,000 note payable due on March 15, year 3. On January 28, year 3, before the issuance of its year 2 financial statements, Cal...






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On March 22, year 1, Cole Corporation received notification of legal action against the firm. Coles attorneys determine that it is probable the com...






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Green, a calendar-year taxpayer, is preparing a personal statement of financial condition as of April 30, year 2. Greens year 1 income tax liabilit...






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On December 31, year 1, Shane is a fully vested participant in a company-sponsored pension plan. According to the plans administrator, Shane has at...






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Clint owns 50% of Vohl Corp.s common stock. Clint paid $20,000 for this stock in year 1. At December 31, year 4, Clints 50% stock ownership in Voh...






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Jen has been employed by Komp, Inc. since February 1, year 1. Jen is covered by Komps Section 401(k) deferred compensation plan. Jens contribution...






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The estimated current values of Lanes personal assets at December 31, year 1, totaled $1,000,000, with tax bases aggregating $600,000. Included in ...






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Shea, a calendar-year taxpayer, is preparing a personal statement of financial condition as of April 30, year 2. Sheas year 1 income tax liability ...






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Personal financial statements usually consist of






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Personal financial statements should report assets and liabilities at






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Personal financial statements should report assets and liabilities at






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Personal financial statements should report assets and liabilities at






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A business interest that constitutes a large part of an individuals total assets should be presented in a personal statement of financial condition...






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Smith owns several works of art. At what amount should these artworks be reported in Smiths personal financial statements?






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In personal financial statements, how should estimated income taxes on the excess of the estimated current values of assets over their tax bases be ...






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In personal financial statements, how should estimated income taxes on the excess of the estimated current values of assets over their tax bases be ...






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The accounting equation (assets liabilities = equity) reflects the






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Which of the following is not a measure of asset utilization?






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What financial analysis technique would imply bench marking with other firms?






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The Dawson Corporation projects the following for the year 2012: .tg {border-collapse:collapse;border-spacing:0;} .tg td{font-family:Arial, sans...






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The Dawson Corporation projects the following for the year 2012: .tg {border-collapse:collapse;border-spacing:0;} .tg td{font-family:Arial, sans...






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Which of the following best describes the reference to the expression “taken as a whole” in the PCAOB’s fourth generally accepted auditing sta...






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A financial statement audit report issued for the audit of an issuer (public) company concludes that the financial statements follow






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Which of the following is not correct concerning information included in an audit report of financial statements issued under the requirements of th...






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A technique uses in a comparative analysis of financial statement is A. B. C. D.






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Net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be






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Price per share is $30 and an earnings per share is $3.5 then price for earnings ratio would be






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Price per share is $25 and cash flow per share is $6 then price to cash flow ratio would be






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Low price for earnings ratio is the result of






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Profit margin = 4.5%, assets turnover = 2.2 times, equity multiplier = 2.7 times then return on assets will be






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Formula such as net income available for common stockholders divided by total assets is used to calculate






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Price per ratio is divided by cash flow per share ratio which is used for calculating






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A technique uses to identify financial statements trends are included






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Net income available to stockholders is $150 and total assets are $2,100 then return on total assets would be






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A formula such as net income available to common stockholders divided by common equity is used to calculate






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Companies that help to set benchmarks are classified as






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Total assets divided common equity is a formula uses for calculating






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Price per share divided by earnings per share is a formula for calculating






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Profit margin multiply assets turnover multiply equity multiplier is used to calculate






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An equation in which total assets are multiplied to profit margin is classified as






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Price earning ratio and price by cash flow ratio are classified as






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Return on assets = 5.5%, Total assets $3,000 and common equity $1,050 then return on equity would be






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Return on assets = 5.5%, Total assets $3,000 and common equity $1,050 then return on equity would be






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Return on assets = 6.7% and equity multiplier = 2.5% then return on equity will be






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Process of comparing company results with other leading firms is considered as






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An equity multiplier is multiplied to return on assets to calculate






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Accumulated Other Comprehensive Income in the shareholders’ equity section of the balance sheet reflects changes in the fair value of securities for...






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The net assets of a corporation are equal to:






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Two of the three primary account classifications within shareholders’ equity are:






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The corporate charter sometimes is known as (a):






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Outstanding common stock is:






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Issued stock refers to the number of shares: