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Question 11.Which method of accounting is preferred under GAAP?
Question 22.An auditor makes a note that there is a patent lawsuit. After the audit is complete, the company losses the lawsuit. If the auditor noted this as a recognized event, what would need to be done?
Question 33.If a sister sold a house to her brother, this would be suspicious to an investor because of which of the following reasons?
Question 44.Your company has $800,000 in sales revenue with a cost of goods sold being $450,000. If you have a 5% return rate, what is you income?
Question 55.Your plumbing company fixed the shower for Jane Smith. You have invoiced Jane for $1,000 but she has not paid yet. Using the accrual method of accounting, how much should you show as income?
Question 66.Which of the following would be a cash outflow operating activity for a small healthcare manufacturer?
Question 77.How is a cash flow statement different from an income statement?
Question 88.Last year your company made a total profit of $100,000. You decide to reinvest all of that money into the company. Where will this information be shown?
Question 99.From a balance sheet, the assets less the owner's equity will equal which of the following?
Question 1010.Why would an investor require a third party audit of a potential portfolio company?
Question 1111.Which of the following would need an external audit?
Question 1212.Which of the following is a job of an auditor?
Question 1313.Where would an investor find information about the total revenue and expenses of a company.
Question 1414.The net income is derived from which pieces of information?
Question 1515.A balance sheet compares liabilities and equity to which of the following?
Question 1616.Your plumbing company fixed the shower for Jane Smith. You have invoiced Jane for $1,000 but she has not paid yet. Using the cash method of accounting, how much should you show as income?
Question 1717.How can money be brought into a company?
Question 1818.When a criminal case is tried, the stenographer writes down every word of the proceeding. How does the principle of monetary management differ?
Question 1919.What is the balance sheet equation?
Question 2020.If an investor wanted to see how much money was maintained and reinvested in the company, which financial statement would give that information?
Question 2121.The people that have invested money into a company, as well as those who are considering making an investment into the company, are called _____.
Question 2222.A company had total revenue of $20,000 for the month ending March 31. In the same time period, the company had $12,000 in expenses. What was the company's net income or net loss?
Question 2323.What is the balance sheet equation?
Question 2424.Which of the sections of the statement of cash flows includes activities that involve cash receipts or cash payments from changes on long-term liabilities?
Question 2525.The Widget Company is changing the way it does its accounting. They used to report revenue only when the money was received, but now they will report it once an order is made. How will this show in the notes?
Question 2626.Explain the purpose of an income statement.
Question 2727.What are the rules and regulations that must be followed when reporting all financial data?
Question 2828.Which of the financial statements reports all accounts that a company has and the account balances?
Question 2929.Why might potential investors and creditors look at a company's financial statements?
Question 3030.What is the term for an examination of a company's financial records by someone that is not an employee of the company?
Financial Statements in Accounting Chapter Exam Instructions
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