F030 Lesson 1 Exam SCORE 100 PERCENT

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