CGA Financial Accounting & Reporting 1

Question 1

Which financial statement provides a snapshot of a company's financial position at a specific point in time?

Accepted Answer

Balance Sheet

Answer

Income Statement

Answer

Statement of Cash Flows

Answer

Statement of Retained Earnings

Question 2

Which accounting principle requires that expenses be matched with revenues?

Accepted Answer

Matching Principle

Answer

Revenue Recognition Principle

Answer

Cost Principle

Answer

Full Disclosure Principle

Question 3

Which of the following is classified as a current asset?

Accepted Answer

Accounts Receivable

Answer

Buildings

Answer

Patents

Answer

Equipment

Question 4

Which statement best explains 'depreciation' in financial reporting?

Accepted Answer

An expense representing wear and tear

Answer

A cash outflow for new assets

Answer

An increase in asset value

Answer

A method to inflate profits

Question 5

Under accrual accounting, revenue is recorded when:

Accepted Answer

Service is performed

Answer

Cash is received

Answer

Invoice is prepared

Answer

Payment is overdue

Question 6

Which report shows cash inflows and outflows from operating, investing, and financing activities?

Accepted Answer

Statement of Cash Flows

Answer

Balance Sheet

Answer

Income Statement

Answer

Retained Earnings Statement

Question 7

What does GAAP stand for?

Accepted Answer

Generally Accepted Accounting Principles

Answer

General Annual Accounting Policy

Answer

Governmental Accounting and Auditing Procedures

Answer

Global Accounting Assessment Protocol

Question 8

Which of the following would increase a company's retained earnings?

Accepted Answer

Net income

Answer

Issuing new shares

Answer

Paying dividends

Answer

Purchasing equipment

Question 9

What is the main purpose of financial accounting?

Accepted Answer

To communicate financial info to stakeholders

Answer

To calculate taxes owed

Answer

To track employee performance

Answer

To help in operational planning