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Financial Statements in Accounting Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. How is a cash flow statement different from an income statement?

Question 2 2. If a sister sold a house to her brother, this would be suspicious to an investor because of which of the following reasons?

Question 3 3. 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 4 4. 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 5 5. A balance sheet compares liabilities and equity to which of the following?

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Question 6 6. 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 7 7. Why would an investor require a third party audit of a potential portfolio company?

Question 8 8. Where would an investor find information about the total revenue and expenses of a company.

Question 9 9. Which of the following is a job of an auditor?

Question 10 10. 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?

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Question 11 11. The net income is derived from which pieces of information?

Question 12 12. From a balance sheet, the assets less the owner's equity will equal which of the following?

Question 13 13. Which of the following would be a cash outflow operating activity for a small healthcare manufacturer?

Question 14 14. Which of the following would need an external audit?

Question 15 15. 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?

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Question 16 16. Which method of accounting is preferred under GAAP?

Financial Statements in Accounting Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next question. You can skip questions if you would like and come back to them later with the "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. You will lose your work if you close or refresh this page. Good luck!

Accounting 101: Financial Accounting  /  Business Courses
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