UTA Entrance Accounting Exam
If net income after tax is $42,000, the tax rate is 30%, and total expenses not including tax expense are
$126,000, revenues must be: - Correct Answers $186,000
Find what the net income was before taxes and add it to expenses to get the total revenue.
The financial statement that reports what the company owns and what the company owes is the -
Correct Answers balance sheet
The balance sheet shows assets, liabilities, and equity which show what is owned and what is owed.
What is supposed to "balance" on the balance sheet? - Correct Answers assets = liabilities + owner's
equity
The purpose of financial accounting is to provide - Correct Answers financial information to external
users
The accounting equation is - Correct Answers assets = liabilities + equity
Which financial statement provides information related to the financial performance of a company
during a specific period? - Correct Answers income statement
The income statement reports earning for a company during a specific time period.
A company reports net income when - Correct Answers services provided are greater than the cost to
provide the services
Which of the following is considered and expense?
prepaid expense
cost of goods sold
, sales
building - Correct Answers cost of goods sold
The government agency with legal authority over financial reporting of U.S. public companies is called -
Correct Answers securities exchange commission (SEC)
FASB has no legal authority
Which financial statement reports dividends paid to shareholders? - Correct Answers statement of
owners equity
Dividends are not reported on the income statement, it is not an expense. They are netted into retained
earnings on the balance sheet.
assets typically include - Correct Answers accounts receivable and equipment
What financial document is for the specific purpose of reporting cash flows? - Correct Answers cash
flow statement
Which statement provides information on goods and services provided to customers? - Correct Answers
income statement
Providing goods and services to customers is revenues which is only on the income statement.
Liabilities are - Correct Answers obligations resulting from past transactions
Prepaid expenses is an asset because - Correct Answers the company owns it
the company has paid ahead and therefore has future benefit
a past transaction has occurred
If net income after tax is $42,000, the tax rate is 30%, and total expenses not including tax expense are
$126,000, revenues must be: - Correct Answers $186,000
Find what the net income was before taxes and add it to expenses to get the total revenue.
The financial statement that reports what the company owns and what the company owes is the -
Correct Answers balance sheet
The balance sheet shows assets, liabilities, and equity which show what is owned and what is owed.
What is supposed to "balance" on the balance sheet? - Correct Answers assets = liabilities + owner's
equity
The purpose of financial accounting is to provide - Correct Answers financial information to external
users
The accounting equation is - Correct Answers assets = liabilities + equity
Which financial statement provides information related to the financial performance of a company
during a specific period? - Correct Answers income statement
The income statement reports earning for a company during a specific time period.
A company reports net income when - Correct Answers services provided are greater than the cost to
provide the services
Which of the following is considered and expense?
prepaid expense
cost of goods sold
, sales
building - Correct Answers cost of goods sold
The government agency with legal authority over financial reporting of U.S. public companies is called -
Correct Answers securities exchange commission (SEC)
FASB has no legal authority
Which financial statement reports dividends paid to shareholders? - Correct Answers statement of
owners equity
Dividends are not reported on the income statement, it is not an expense. They are netted into retained
earnings on the balance sheet.
assets typically include - Correct Answers accounts receivable and equipment
What financial document is for the specific purpose of reporting cash flows? - Correct Answers cash
flow statement
Which statement provides information on goods and services provided to customers? - Correct Answers
income statement
Providing goods and services to customers is revenues which is only on the income statement.
Liabilities are - Correct Answers obligations resulting from past transactions
Prepaid expenses is an asset because - Correct Answers the company owns it
the company has paid ahead and therefore has future benefit
a past transaction has occurred
