CPA Exam FAR 1 Module 1-Complete Exam
Study Guide with Verified Answers |
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Statement of Financial Position (BS) determines ------- ✔ CORRECT ANSWER ✓✓1. Risk
2. Short Term Liquidity
3. Long Term Solvency
Statement of Earnings (IS) determines ------- ✔ CORRECT ANSWER ✓✓1. Performance Risk
2. Operating Risk
Statement of comprehensive income is made up of ------- ✔ CORRECT ANSWER ✓✓1. Net
Income
2. Other Comprehensive Income
Statement of Cash Flows determines ------- ✔ CORRECT ANSWER ✓✓1. Why cash changed
2. Quality of earnings
3. Growth potential
Statement of Owners Equity determines ------- ✔ CORRECT ANSWER ✓✓1. Why has
shareholders equity changed
What are the three things that could change the statement of owners equity? ------- ✔
CORRECT ANSWER ✓✓A change in...
1. Capital
,2. RE
3. AOCI
A classified balance sheet distinguishes between ------- ✔ CORRECT ANSWER ✓✓Current and
noncurrent Assets and Liabilities
On a classified balance sheet, items are listed in order of ------- ✔ CORRECT ANSWER
✓✓liquidity
CA/CL helps determine ------- ✔ CORRECT ANSWER ✓✓Liquidity
Debt/Equity helps to determine ------- ✔ CORRECT ANSWER ✓✓Solvency
RE and AOCI help to determine ------- ✔ CORRECT ANSWER ✓✓Earned Capital
Treasury stock is a __________ account ------- ✔ CORRECT ANSWER ✓✓contra-equity
Preferred stock, common stock, and paid in capital are all part of ------- ✔ CORRECT ANSWER
✓✓contributed equity
What are the purposes of the Balance Sheet ------- ✔ CORRECT ANSWER ✓✓1. Determine short
term and long term risk
2. Determine the capacity to produce
3. Shows types of assets and liabilities
4. Evaluates liquidity and long term solvency
, Assets ------- ✔ CORRECT ANSWER ✓✓Future economic benefit
Liabilities ------- ✔ CORRECT ANSWER ✓✓First claim on asset; have a maturity date
Equity ------- ✔ CORRECT ANSWER ✓✓Second claim on asset; Preferred stock is 2nd claim and
common stock has the last claim
Amounts on the balance sheet are not equal to ------- ✔ CORRECT ANSWER ✓✓the market
value of the entity
Many assets and equity issuances are measured at ------- ✔ CORRECT ANSWER ✓✓historical
cost
What are the purposes of the income statement? ------- ✔ CORRECT ANSWER ✓✓1. Indicates
performance for a period of time
2. Helps to determine operating risk
3. Provides info about revenues, expenses, gains and losses
There are ______ and ______ users of the income statement ------- ✔ CORRECT ANSWER
✓✓internal and external
External users of the income statement include ------- ✔ CORRECT ANSWER ✓✓investors,
stockholders, lenders
Investors and Stockholders using the IS use the info to evaluate ------- ✔ CORRECT ANSWER
✓✓1. Profitability and value
2. Operating Income
Study Guide with Verified Answers |
Guaranteed A+
Statement of Financial Position (BS) determines ------- ✔ CORRECT ANSWER ✓✓1. Risk
2. Short Term Liquidity
3. Long Term Solvency
Statement of Earnings (IS) determines ------- ✔ CORRECT ANSWER ✓✓1. Performance Risk
2. Operating Risk
Statement of comprehensive income is made up of ------- ✔ CORRECT ANSWER ✓✓1. Net
Income
2. Other Comprehensive Income
Statement of Cash Flows determines ------- ✔ CORRECT ANSWER ✓✓1. Why cash changed
2. Quality of earnings
3. Growth potential
Statement of Owners Equity determines ------- ✔ CORRECT ANSWER ✓✓1. Why has
shareholders equity changed
What are the three things that could change the statement of owners equity? ------- ✔
CORRECT ANSWER ✓✓A change in...
1. Capital
,2. RE
3. AOCI
A classified balance sheet distinguishes between ------- ✔ CORRECT ANSWER ✓✓Current and
noncurrent Assets and Liabilities
On a classified balance sheet, items are listed in order of ------- ✔ CORRECT ANSWER
✓✓liquidity
CA/CL helps determine ------- ✔ CORRECT ANSWER ✓✓Liquidity
Debt/Equity helps to determine ------- ✔ CORRECT ANSWER ✓✓Solvency
RE and AOCI help to determine ------- ✔ CORRECT ANSWER ✓✓Earned Capital
Treasury stock is a __________ account ------- ✔ CORRECT ANSWER ✓✓contra-equity
Preferred stock, common stock, and paid in capital are all part of ------- ✔ CORRECT ANSWER
✓✓contributed equity
What are the purposes of the Balance Sheet ------- ✔ CORRECT ANSWER ✓✓1. Determine short
term and long term risk
2. Determine the capacity to produce
3. Shows types of assets and liabilities
4. Evaluates liquidity and long term solvency
, Assets ------- ✔ CORRECT ANSWER ✓✓Future economic benefit
Liabilities ------- ✔ CORRECT ANSWER ✓✓First claim on asset; have a maturity date
Equity ------- ✔ CORRECT ANSWER ✓✓Second claim on asset; Preferred stock is 2nd claim and
common stock has the last claim
Amounts on the balance sheet are not equal to ------- ✔ CORRECT ANSWER ✓✓the market
value of the entity
Many assets and equity issuances are measured at ------- ✔ CORRECT ANSWER ✓✓historical
cost
What are the purposes of the income statement? ------- ✔ CORRECT ANSWER ✓✓1. Indicates
performance for a period of time
2. Helps to determine operating risk
3. Provides info about revenues, expenses, gains and losses
There are ______ and ______ users of the income statement ------- ✔ CORRECT ANSWER
✓✓internal and external
External users of the income statement include ------- ✔ CORRECT ANSWER ✓✓investors,
stockholders, lenders
Investors and Stockholders using the IS use the info to evaluate ------- ✔ CORRECT ANSWER
✓✓1. Profitability and value
2. Operating Income
