General Financial Reporting MCQs

1. A balance sheet typically has:

2. Who typically needs to approve a financial statement when they are a SEC filing?

3. True or False? The diluted earnings per share is a more reliable way to measure earnings per share.

4. The single step income statement approach totals revenues and subtracts ________?

5. The general formula for a balance sheet is

6. What does the SEC stand for?

7. True or False? Creditors use financial reports to make decisions on loans.

8. If the Net Present Value of a project is postive then __________?

9. Financial reports are filled out based on the:

10. The balance sheet reports a company's assets, liabilities and what?

11. True or False? A cash flow statement shows only the inflows of cash into the company.

12. True or False? A personal financial statement is useful when trying to obtain a loan.

13. The Three Parts of the Cash Flow Statements include Operating, Investing and ______?

14. Which of the following is a current asset?

15. The balance sheet is also referred to as what?

16. If a bond is trading at par, what is its face value?

17. True or False? Financial reporting is a financial statement that is a proper documentation of the financial activities of a business.

18. Financial reports are used to find:

19. Which of the following is an example of a non-current asset?

20. The GAAP is comprised of:

21. True or False? The balance sheet is a snapshot of a firm's financial position.

22. True or False? Financial reports are not important in making investment decisions.

23. True or False? ROA stands for Return on Asset.

24. An item needed for financial reporting is:

25. What are the three parts of a firm's balance sheet?

26. An example of an SEC filing is a:

27. The full disclosure principle indicates...

28. True of False? Financial statements need to be audited.

29. What does it mean if a company has a negative EPS?

30. Accrual Basis Accounting matches what?

31. When are current liabilities due?

32. The cash flow statement details a firm's _________?

33. Which activity is represented first in the Cash Flow Statements?

34. If a firm's payout ratio is greater than 1, the firm is __________?

35. True or False? Only businesses use financial reports.

36. True or false? Operating margin is a good tool when deciding to invest in a company.

37. What was the purpose of the Sarbanes-Oxley Act of 2002?

38. An example of a financial report is a:

39. Which is the correct accounting equation?

40. Revenue - Expenses = what?

41. Net profit margin =

42. A firm with a low profit margin indicates __________________?

43. The matching principle is:

44. True or False? Charitable organizations that are required to publish financial statements do not produce income statements. Instead they publish statement of activities.

45. Nowadays most financial statements can be found on

46. What does the I stand for in EBITDA?

47. True or False? The notes to financial statements are additional information that is added to the beginning of the financial statements

48. True or False: The asset turnover ratio measure the firm's efficient use of its liabilities in generating sales income?

49. True or False? A form 8k is used to notify investors of some meaningful event arising.

50. How do you calculate market capitalization?

51. True or False? Dividends appear on the income statement.

52. Which form corresponds to an annual summary?

53. Which of the following is a general purpose financial report

54. The SEC usually deals with:

55. The revenue recognition principle is:

56. The cost principle is:

57. If the price per share of a company is $10 and and its EPS is $1, then what is its PE ratio?

58. Current Dividend Yield = ?

59. Earnings per share = ?

60. True or False? Earnings per share do not include taxes for the year.

61. A 10Q is a financial report for a company that is given

62. In 2001, the International Accounting Standards Board (IASB) took over from what prior organization?

63. True or False? There are three basic types of accounting models?

64. What do you obtain from this expression: (Earnings After Tax / Net Profit After Tax) - Payable Dividends

65. The financial crisis of 2008 led to more

66. How do you calculate goodwill?

67. Operational efficiency is measured by which part of the DuPont ratio?

68. Which of the following are not considered financial reports?

69. A decrease in non-current assets is _________ net income.

70. Return on Asset = Net income / Sales * ?

71. The DuPont Analysis measures breaks down the Return of Equity into how many parts?

72. The qualitative characteristics of financial statements include Materiality and

73. True or False? Net operating gains are added to net income when calculating a cash flows operating activity?

74. True or False? The SEC and FASB have similar duties.

75. True or False? Working capital is the money it takes to pay off its current liabilities.

76. True or False? Financial reporting is not needed by small companies listed on the OTC bulletin board.

77. What does the indirect method of preparing the cash flow statement effectively accomplish?

78. Which cash collection technique is the most cost-effective for companies with many locations?

79. How does Treasury Stock differ from Trading Stock?

80. How often do companies typically generate standard financial reports?

81. What is one procedure a Company Manager would take to make the information on financial reports more useful for examination?

82. How does the income statement of a charity differ from that of a public company?

83. In what general way do investors use the information in the financial statements?

84. Which is not a part of cost of goods sold?

85. Which does Financing Activities not include?

86. A company declares a dividend. What is its effect on the cash?

87. How are the Cash Flow Statement and Balance Sheet related?

88. What is the primary reason a government entity would want to look at a company's financial statements?

89. A company pays out a previous declared common stock dividend. What is its effect on the cash?

90. What is the purpose of a trial balance?

91. The best financial report to see a company's cash balance is ______.

92. What purpose would a company's financial statements have for the lending institutions?

93. Financial managers use the _____________ to plan for monthly financing needs.

94. What is another name for the Balance Sheet?

95. How are the Cash Flow Statement and Balance Sheet related?

96. What are the four traits of a useful financial statement?

97. What is Treasury Stock?

98. How do investors turn the information on the financial statements into more useful data which is comparable to other companies?

99. The formula to calculate Ending Retained Earnings is ______.

100. What does GAAP stand for?

101. Which financial statement best allows a firm to assess its ability to pay dividends?

102. What is one possible use employees would have of the company financial statements?

103. Which is the 3 main sections of Statement of Cash Flows?

104. Which does the cash flow cycle measure?

105. Which transaction would have no impact on the stockholder's equity?

106. Which transaction is a non cash event but would be disclosed in the notes of the Statement of Cash Flows?

107. What does the Balance Sheet reflect?

108. How does Gross Income differ from Net Income?

109. What is historical value?

110. When a company files a statement of their financial plans for the next two years with the SEC, it is called a ______.

111. What does Treasury Stock appear on the balance sheet as?

112. What are the main categories of a balance sheet?

113. What way is government accounting different from public company accounting?

114. What is the one problem while comparing financial statements with companies based in different countries?

115. Which is the primary financial statement used to measure profitability?

116. How are the income statement and balance sheet linked?

117. By doing/issuing which could a company raise short-term funds by selling receivables and inventory?

118. How would the financial statements be useful for a Company Manager?

119. Purpose of the statement of cash flows?

120. Which is not a fundamental of accounting?

121. Pro forma statements are _______ statements.

122. Retained earnings will change over time because of several factors. Which factors would lead to an increase in the Retained Earnings?

123. Which is/are the primary financial statements used to measure stability?

124. Which is a difference between a public company and a private one?

125. What is the purpose of an audit?

126. Why do companies include notes along with the financial statements?

127. With which regulatory bodies would a publicly traded company be much more involved than a private company would be?

128. Which is an example of a variable cost?

129. Why is the Statement of RE created?

130. Why is depreciation added back in the cash flow statement?

131. Why would someone be interested in how the company used its cash?

132. Why would the general public be interested in a company's financial statements?

133. Why would a company repurchase their own stock?

134. Which item would be accounted for as an expense?

135. Why would a company repurchase their own stock?

136. What number is transferred from the Income Statement to the Cash Flow statement?

137. Which would not appear on an income statement?

138. Why would R&D be possibly included on both or either the Income Statement and Balance Sheet?

139. Which is the four general groups of outside users of a company's financial reports?

140. Which would not be included in a balance sheet?

141. Which is a part of 'Other Revenues'?

142. Which is the method of preparing the cash flow statement?

143. Which operating section of a cash flow statement not contain?

144. A company prepays for 6 months of insurance. What effect does this have on their current assets?

145. How are the Statement of Retained Earnings & the Balance Sheet related?

146. Which item would be shown separately on the income statement after the normal operations?

147. Which errors/s can a trial balance be used to detect?

148. What purpose would a company's financial statements have for the lending institutions?