Question 1

You would expect to find the account "consulting revenue" in which of the following places in the financial statements?

Accepted Answer

A)  In the balance sheet 
B)  In the income statement 
C)  In the statement of changes in shareholders' equity 
D)  In a cash flow statement prepared using the indirect method 
A)  In the balance sheet 
B)  In the income statement 
C)  In the statement of changes in shareholders' equity 
D)  In a cash flow statement prepared using the indirect method B

Question 2

The ""management discussion and analysis"" section of an SEC filing is an example of a prose report.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is not a recommended practice in making clear tables?

Accepted Answer

A)  Eliminating excessive lines 
B)  Rounding numbers to two significant digits 
C)  Always listing items alphabetically 
D)  Providing summary data 
A)  Eliminating excessive lines 
B)  Rounding numbers to two significant digits 
C)  Always listing items alphabetically 
D)  Providing summary data C

Question 4

When writing business reports, it is good practice to use long, impressive words, rather than short, ordinary ones.

Accepted Answer

A) True 
 B)False

Question 5

Effects of changes in the market price of securities that the company is holding for short-term trading purposes affect ""other comprehensive income"" but not net income.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would cause net income on the accrual basis to be different than (either higher or lower) ""cash provided by operating activities"" on the statement of cash flows?

Accepted Answer

A)  Accrued interest earned on a certificate of deposit 
B)  Paid a cash dividend to the stockholders 
C)  Purchased a certificate of deposit for cash 
D)  Purchased land for cash 
A)  Accrued interest earned on a certificate of deposit 
B)  Paid a cash dividend to the stockholders 
C)  Purchased a certificate of deposit for cash 
D)  Purchased land for cash

Question 7

Financial statements prepared under generally accepted accounting principles are meant to compute the market value of the company as of the balance sheet date.

Accepted Answer

A) True 
 B)False

Question 8

Tables are usually better than graphs in displaying trends in large amounts of data.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not one of the four basic financial statements?

Accepted Answer

A)  Statement of risky assets 
B)  Statement of cash flows 
C)  Statement of changes in equity 
D)  Balance sheet 
A)  Statement of risky assets 
B)  Statement of cash flows 
C)  Statement of changes in equity 
D)  Balance sheet

Question 10

You would expect to find the term "operating cash flows" in which of the following places in the financial statements?

Accepted Answer

A)  In the balance sheet 
B)  In the income statement 
C)  In the statement of changes in shareholders' equity 
D)  In a cash flow statement prepared using the indirect method 
A)  In the balance sheet 
B)  In the income statement 
C)  In the statement of changes in shareholders' equity 
D)  In a cash flow statement prepared using the indirect method

Question 11

Which of the following items would normally not be seen in a statement of changes in shareholders' equity?

Accepted Answer

A)  Land 
B)  Net comprehensive income or loss 
C)  Dividends 
D)  New issues of common stock 
A)  Land 
B)  Net comprehensive income or loss 
C)  Dividends 
D)  New issues of common stock

Question 12

Effects of changes in the assumptions of pension plans are typically part of the computation of ""other comprehensive income,"" but not ""net income.""

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not a recommended practice when using graphs to present quantitative data?

Accepted Answer

A)  Starting the vertical axis at zero 
B)  Make the physical (visual) representation of a quantity be proportional to its numerical value 
C)  Use selective enhancements to draw the user's eye to good news and away from bad news 
D)  Maximize the ratio of "data" to "ink" 
A)  Starting the vertical axis at zero 
B)  Make the physical (visual) representation of a quantity be proportional to its numerical value 
C)  Use selective enhancements to draw the user's eye to good news and away from bad news 
D)  Maximize the ratio of "data" to "ink"

Question 14

Which of the following is a recommended practice when using graphs to present quantitative data?

Accepted Answer

A)  Use the brightest available colors to draw the user's eye to good news and away from bad news 
B)  Use pie charts to show trends in data 
C)  Start the vertical axis at zero 
D)  Use three-dimensional effects to make the visual appearance of numbers larger than their numerical values 
A)  Use the brightest available colors to draw the user's eye to good news and away from bad news 
B)  Use pie charts to show trends in data 
C)  Start the vertical axis at zero 
D)  Use three-dimensional effects to make the visual appearance of numbers larger than their numerical values

Question 15

A cash flow statement prepared using the indirect method will usually show the amounts of cash a company received from customers, paid to suppliers, and paid to employees.

Accepted Answer

A) True 
 B)False

Question 16

The account "unearned revenue" would appear on which financial statement?

Accepted Answer

A)  Balance sheet, as an asset 
B)  Balance sheet, as a liability 
C)  Income statement, as a revenue 
A)  Balance sheet, as an asset 
B)  Balance sheet, as a liability 
C)  Income statement, as a revenue

Question 17

You would expect to find the account "Income tax expense" in which of the following places in the financial statements?

Accepted Answer

A)  In the balance sheet 
B)  In the income statement 
C)  In the statement of changes in shareholders' equity 
D)  In a cash flow statement prepared using the indirect method 
A)  In the balance sheet 
B)  In the income statement 
C)  In the statement of changes in shareholders' equity 
D)  In a cash flow statement prepared using the indirect method

Question 18

One limitation of financial statements is that financial statements show information about the past, while the users may be interested in the future.

Accepted Answer

A) True 
 B)False

Question 19

The account "prepaid rent" would appear on which financial statement?

Accepted Answer

A)  Balance sheet, as an asset 
B)  Balance sheet, as a liability 
C)  Income statement, as an expense 
A)  Balance sheet, as an asset 
B)  Balance sheet, as a liability 
C)  Income statement, as an expense

Question 20

Which of the following is one of the four basic financial statements?

Accepted Answer

A)  Balance sheet 
B)  Statement of changes in accounts receivable 
C)  Statement of owners' liquidity 
D)  Auditors' report 
A)  Balance sheet 
B)  Statement of changes in accounts receivable 
C)  Statement of owners' liquidity 
D)  Auditors' report

You would expect to find the account "consulting revenue" in which of the following places in the financial statements?

The ""management discussion and analysis"" section of an SEC filing is an example of a prose report.

Which of the following is not a recommended practice in making clear tables?

When writing business reports, it is good practice to use long, impressive words, rather than short, ordinary ones.

Effects of changes in the market price of securities that the company is holding for short-term trading purposes affect ""other comprehensive income"" but not net income.

Which of the following would cause net income on the accrual basis to be different than (either higher or lower) ""cash provided by operating activities"" on the statement of cash flows?

Financial statements prepared under generally accepted accounting principles are meant to compute the market value of the company as of the balance sheet date.

Tables are usually better than graphs in displaying trends in large amounts of data.

Which of the following is not one of the four basic financial statements?

You would expect to find the term "operating cash flows" in which of the following places in the financial statements?

Which of the following items would normally not be seen in a statement of changes in shareholders' equity?

Effects of changes in the assumptions of pension plans are typically part of the computation of ""other comprehensive income,"" but not ""net income.""

Which of the following is not a recommended practice when using graphs to present quantitative data?

Which of the following is a recommended practice when using graphs to present quantitative data?

A cash flow statement prepared using the indirect method will usually show the amounts of cash a company received from customers, paid to suppliers, and paid to employees.

The account "unearned revenue" would appear on which financial statement?

You would expect to find the account "Income tax expense" in which of the following places in the financial statements?

One limitation of financial statements is that financial statements show information about the past, while the users may be interested in the future.

The account "prepaid rent" would appear on which financial statement?

Which of the following is one of the four basic financial statements?

How Accounting Works

Selecting Your Business Structure

Managing Your Accounts

Accounting for Inventory

Doing Business Day to Day

Tackling the General Ledger

Reconciling Bank and Credit Card Statements

Setting up New Team Members

Understanding Insurance

Other Benefits and Reimbursements

Payroll Taxes

Appendix

Filters

Exam 3: Choosing Accounting Software

You would expect to find the account "consulting revenue" in which of the following places in the financial statements?

The ""management discussion and analysis"" section of an SEC filing is an example of a prose report.

Which of the following is not a recommended practice in making clear tables?

When writing business reports, it is good practice to use long, impressive words, rather than short, ordinary ones.

Effects of changes in the market price of securities that the company is holding for short-term trading purposes affect ""other comprehensive income"" but not net income.

Which of the following would cause net income on the accrual basis to be different than (either higher or lower) ""cash provided by operating activities"" on the statement of cash flows?

Financial statements prepared under generally accepted accounting principles are meant to compute the market value of the company as of the balance sheet date.

Tables are usually better than graphs in displaying trends in large amounts of data.

Which of the following is not one of the four basic financial statements?

You would expect to find the term "operating cash flows" in which of the following places in the financial statements?

Which of the following items would normally not be seen in a statement of changes in shareholders' equity?

Effects of changes in the assumptions of pension plans are typically part of the computation of ""other comprehensive income,"" but not ""net income.""

Which of the following is not a recommended practice when using graphs to present quantitative data?

Which of the following is a recommended practice when using graphs to present quantitative data?

A cash flow statement prepared using the indirect method will usually show the amounts of cash a company received from customers, paid to suppliers, and paid to employees.

The account "unearned revenue" would appear on which financial statement?

You would expect to find the account "Income tax expense" in which of the following places in the financial statements?

One limitation of financial statements is that financial statements show information about the past, while the users may be interested in the future.

The account "prepaid rent" would appear on which financial statement?

Which of the following is one of the four basic financial statements?

How Accounting Works

Selecting Your Business Structure

Managing Your Accounts

Accounting for Inventory

Doing Business Day to Day

Tackling the General Ledger

Reconciling Bank and Credit Card Statements

Setting up New Team Members

Understanding Insurance

Other Benefits and Reimbursements

Payroll Taxes

Appendix

Filters