Financial Accounting EMBA 1

Which of the following could have a negative value?

• Assets

• Equity

• Liabilities

• None of the others

Indicate which one(s) is/are not the financial statement(s)

• Statement of Financial Position

• Statement of Cash Flows

• Statement of Equity

• Statement of Accounting Principles

An asset is a resource controlled by the entity as a result of current events

• Yes

• No

What is the primary purpose of financial statements?

• To provide information about the financial position

• To calculate taxes

• To manage employee performance

• To determine market trends

Accrual accounting recognizes expenses when they are paid

• Yes

• No

Retained earnings are

• assets

• equal to net income

• equal to net loss

• none of the other answers is correct

Which of the following could be both current and non-current?

• Property, Plant, and Equipment

• Intangible Assets

• Investments

• Cash

Historical ____ is the most common valuation basis in financial accounting

Cash equivalents are short-term highly liquid investments that mature within six months or less

• Yes

• No

Currency used in financial statements to present the numbers (aka presentation currency), according to IFRS,

• can be chosen freely by the entity

• should be the currency used in the country of incorporation

• has to be either USD or EUR, unless auditors agree to other

• should be the currency that is most appropriate for the primary users of the financial statements