UTA ACCOUNTING ENTRANCE
CERTIFICATION EVALUATION TEST PAPER
COMPLETE QUESTIONS AND SOLUTIONS
●● The financial statement that reports what the company owns and
what the company owes is the
Answer: 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?
Answer: assets = liabilities + owner's equity
●● The purpose of financial accounting is to provide
Answer: financial information to external users
●● The accounting equation is
Answer: assets = liabilities + equity
●● Which financial statement provides information related to the
financial performance of a company during a specific period?
,Answer: income statement
The income statement reports earning for a company during a specific
time period.
●● A company reports net income when
Answer: 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
Answer: cost of goods sold
●● The government agency with legal authority over financial reporting
of U.S. public companies is called
Answer: securities exchange commission (SEC)
FASB has no legal authority
, ●● Which financial statement reports dividends paid to shareholders?
Answer: 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
Answer: accounts receivable and equipment
●● What financial document is for the specific purpose of reporting cash
flows?
Answer: cash flow statement
●● Which statement provides information on goods and services
provided to customers?
Answer: income statement
Providing goods and services to customers is revenues which is only on
the income statement.
●● Liabilities are
Answer: obligations resulting from past transactions
CERTIFICATION EVALUATION TEST PAPER
COMPLETE QUESTIONS AND SOLUTIONS
●● The financial statement that reports what the company owns and
what the company owes is the
Answer: 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?
Answer: assets = liabilities + owner's equity
●● The purpose of financial accounting is to provide
Answer: financial information to external users
●● The accounting equation is
Answer: assets = liabilities + equity
●● Which financial statement provides information related to the
financial performance of a company during a specific period?
,Answer: income statement
The income statement reports earning for a company during a specific
time period.
●● A company reports net income when
Answer: 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
Answer: cost of goods sold
●● The government agency with legal authority over financial reporting
of U.S. public companies is called
Answer: securities exchange commission (SEC)
FASB has no legal authority
, ●● Which financial statement reports dividends paid to shareholders?
Answer: 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
Answer: accounts receivable and equipment
●● What financial document is for the specific purpose of reporting cash
flows?
Answer: cash flow statement
●● Which statement provides information on goods and services
provided to customers?
Answer: income statement
Providing goods and services to customers is revenues which is only on
the income statement.
●● Liabilities are
Answer: obligations resulting from past transactions
