| 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
|
