The most common description of IFRS as contrasted to GAAP is that

The most common description of IFRS as contrasted to GAAP is that

a. GAAP is principles based and IFRS is rules based.
b. GAAP is principles based and IFRS is concepts based.
c. GAAP is rules based and IFRS is rules based.
d. GAAP is rules based and IFRS is principles based.

Answer: D

Which section of the annual report presents highlights of favorable or unfavorable trends and identifies significant events and uncertainties affecting a company's ability to pay near-term obligations, and a company's ability to fund operations and expansion?

Which section of the annual report presents highlights of favorable or unfavorable trends and identifies significant events and uncertainties affecting a company's ability to pay near-term obligations, and a company's ability to fund operations and expansion?

a. Auditor's report
b. Notes to the financial statements
c.Financial statements
d. Management discussion and analysis

Answer: A

An annual report includes all of the following except

An annual report includes all of the following except

a. a management discussion and analysis section.
b. notes to the financial statements.
c. an auditor's report.
d. a listing of all of the stockholders.

Answer: B

When the auditor is satisfied that the financial statements provide a fair representation of the company's financial position and results of operation in accordance with generally accepted accounting principles, the auditor will express

When the auditor is satisfied that the financial statements provide a fair representation of the company's financial position and results of operation in accordance with generally accepted accounting principles, the auditor will express

a. a disclaimer of opinion.
b. an adverse opinion.
c. unqualified opinion.
d. a qualified opinion.

Answer: D

The segment of the annual report that presents an opinion regarding the fairness of the presentation of the financial position and results of operations is/are the

The segment of the annual report that presents an opinion regarding the fairness of the presentation of the financial position and results of operations is/are the

a. balance sheet.
b. financial statements.
c. income statement.
d. auditor's opinion.

Answer: B

The segment of a corporation's annual report that describes the corporation's accounting methods is the

The segment of a corporation's annual report that describes the corporation's accounting methods is the

a. income statement.
b. notes to the financial statements.
c. management discussion and analysis.
d. auditor's report.

Answer: B

Stockholders' equity represents

Stockholders' equity represents

a. the difference between revenues and expenses.
b. economics resources to be used in the future.
c. claims of creditors.
d. claims of owners.

Answer: D

The ending retained earnings balance appears on

The ending retained earnings balance appears on

a. both the retained earnings statement and the balance sheet.
b. the retained earnings statement only.
c. the balance sheet only.
d. the income statement and the retained earnings statement.

Answer: B

How do you find stockholder's equity at the end of the year?

How do you find stockholder's equity at the end of the year?

Answer: Beg. Stockholder's equity + Net Income - Dividends = Ending Stockholders Equity.

T/F The statement of cash flows reports net income, investing, and financing activities?

T/F The statement of cash flows reports net income, investing, and financing activities?

Answer: False

Which of the following would not appear on the retained earnings statement?

Which of the following would not appear on the retained earnings statement?

a. Service revenue
b. Dividends
c. Net income
d. Beginning retained earnings balance

Answer: B

What kind of classification is cost of goods sold?

What kind of classification is cost of goods sold?

a. expense.
b. liability.
c. revenue
d. asset

Answer: A

Which of the following is an example of a financing activity?

Which of the following is an example of a financing activity?

a. Buying delivery equipment
b. Buying inventory
c. Issuing shares of common stock
d. Selling goods on account

Answer: C

The payment of dividends is an example of a(n)

The payment of dividends is an example of a(n) 

a. financing activity.
b. investing activity.
c. delivery activity.
d. operating activity.

Answer: A

Paying interest expense and receiving interest revenue are examples of

Paying interest expense and receiving interest revenue are examples of 

a. financing activities
b. delivery activities
c. operating activities
d. investing activities

Answer: C

T/F Interest expense is classified under operating activities on the statement of cash flows.

T/F Interest expense is classified under operating activities on the statement of cash flows.

Answer: True

Which of the following is required as a result of SOX?

Which of the following is required as a result of SOX?

a. All shareholders now have an oversight role of the company's financial activities.
b. Top management must certify the financial statements for their company.
c. Public companies must present audited financial statements.
d. Companies that go bankrupt must repay shareholders for loss investments.

Answer: B

Which of the following did not result from the Sarbanes-Oxley Act?

Which of the following did not result from the Sarbanes-Oxley Act?

a. Penalties for fraudulent activity increased.
b. Auditors cannot provide non-audit services to the same client.
c. Tax rates on corporations increased.
d. Top management must now certify the accuracy of financial information.

Answer: C

Which of the following is not an external user of accounting data?

Which of the following is not an external user of accounting data?

a. economic planners.
b. labor unions.
c. customers.
d. chief financial officers.

Answer: D

Which forms of business organizations are considered to be separate accounting entities?

Which forms of business organizations are considered to be separate accounting entities?

a. only corporations.
b. sole proprietorships, corporations, and partnerships.
c. sole proprietorships and partnerships only.
d. partnerships and corporations only.

Answer: B