Finacre-Mod 3&4

Easy. What financial statement is prepared to disclose significant events relating to the operating, investing, and financing activities of a business?

• Statement of Financial Performance

• Statement of Changes in Equity

• Statement of Financial Position

• Statement of Cash Flows

Easy. Of the following errors, the one that will cause an inequality in the trial balance totals is

• Recording the same transaction more than once

• Posting a transaction to the wrong account

• Incorrectly computing an account balance

• Failure to record a transaction

Average. Which of the following statements is correct?

• Purchase of properties by a real estate corporation is an investing activity.

• Cash payment of interest on a long-term notes payable is an operating activity.

• Payment for office rental for the month is an operating activity.

• Additional cash investment from owner is a financing activity.

Easy. Failure to record the unexpired portion of the insurance premium paid would

• Understate expense

• Overstate Owner’s equity

• Understate profit

• Overstate total liabilities

Easy. What standard governs the presentation of financial statements?

• PAS 1

• PAS 2

• PAS 16

• PAS 7

Easy. Failure to adjust for accrued salaries at the end of the period will result in an

• Overstatement of profit

• Understatement of profit

• Overstatement of assets

• Overstatement of liabilities

Average. Which of the following is a cash outflow from investing activities?

• Payment to acquire a service vehicle

• Payment to settle notes payable

• Payment to owners’ withdrawals

• Payment to tax and interest expenses

Easy. Which of the following accounts could appear in an adjusting entry, closing entry, and reversing entry?

• Salaries Payable

• Interest Income

• Depreciation Expense

• Accumulated Depreciation

Average. Which of the following statements is incorrect?

• Supplies expense is a temporary account

• Reversing entries can be made for deferrals but not for accruals

• Balance sheet accounts are also known as real accounts

• The final trial balance will contain real accounts only

Average. If the amount of profit for the current period is less than the amount of owner’s withdrawals, assuming there is no additional investment made, the result is a (an)

• Increase in owner’s capital account

• Increase in the cash account

• Decrease in owner’s capital account

• Increase in liabilities on the balance sheet