PACE Exam Review Questions and Answers
1.Financial Accounting
Answer used in preparing general purpose financial statements such as
income statements, retained earnings statements, balance sheets, and
statement of cash flows
2.Income Statement
Answer reports a firms profitability for a period of time as measured by
the excess of revenues over expenses
3.Revenues
Answer increases in net assets resulting from sales of goods or services
4.Expenses
Answer costs incurred to generate the revenues
5.Retained Earnings Statement
Answer reconciles the beginning balance of RE for the period to the
ending balance of RE for the period
6.Net Income RE
Answer increases
1/
5
, 7.Net Loss RE
Answer decreases
8.Dividends RE
Answer decrease
9.Balance Sheet
Answer reports a firms assets, liabilities, and stockholders equity at a
point in time
10.Assets
Answer measurable resources of a firm
11.Liabilities
Answer obligations owed by a firm to third parties
12.Stockholders Equity
Answer the owners interest in the firm
13.Stockholders Equity is Comprised of and
Answer contributed capital earnings retained in the firm
14.Statement of Cash Flows
Answer Provides a detailed analysis of the changes in cash during the
year
2/
5
1.Financial Accounting
Answer used in preparing general purpose financial statements such as
income statements, retained earnings statements, balance sheets, and
statement of cash flows
2.Income Statement
Answer reports a firms profitability for a period of time as measured by
the excess of revenues over expenses
3.Revenues
Answer increases in net assets resulting from sales of goods or services
4.Expenses
Answer costs incurred to generate the revenues
5.Retained Earnings Statement
Answer reconciles the beginning balance of RE for the period to the
ending balance of RE for the period
6.Net Income RE
Answer increases
1/
5
, 7.Net Loss RE
Answer decreases
8.Dividends RE
Answer decrease
9.Balance Sheet
Answer reports a firms assets, liabilities, and stockholders equity at a
point in time
10.Assets
Answer measurable resources of a firm
11.Liabilities
Answer obligations owed by a firm to third parties
12.Stockholders Equity
Answer the owners interest in the firm
13.Stockholders Equity is Comprised of and
Answer contributed capital earnings retained in the firm
14.Statement of Cash Flows
Answer Provides a detailed analysis of the changes in cash during the
year
2/
5
