CFA Assessment Test Questions and
Answers
Morrison Company experienced a business event that had the following effect on its
accounting equation:
Assets= 25,000
Liabilities= 25,000
common stock= NA
Retained earnings= NA - Answer-Paid off debt
Daemon Company paid cash to purchase land. Which of the following shows how this
event will affect the company's accounting equation? The letters "NA" indicate that the
component of the equation is not affected. - Answer-Assets= +-
Liabilities= NA
Common stock= NA
Retained earnings= NA
Fen Company paid a $300 cash dividend. Which of the following shows how this event
will affect the company's accounting equation? The letters "NA" indicate that the
component of the equation is not affected. - Answer-Assets= 300
Liabilities= NA
Common stock= NA
Retained earnings= 300
Which of the following is a true statement? - Answer-All are true:
A cash revenue is an economic benefit that will cause assets and retained earnings to
increase.
A cash expense is an economic sacrifice that will cause assets and retained earnings to
decrease.
A cash dividend is a transfer of assets from a business to its owners that will cause the
assets and retained earnings of the business to decrease.
The accounting records of Coastal Company contained the following account balances.
Cash $ 500
Land $ 800
Notes Payable $ 200
Common Stock $ 400
, The records also contained an account titled Retained Earnings. Based on this
information the balance of the retained earnings account must be - Answer-$700
The following accounting equation represents the financial position of Qualtro Company.
Based on this equation, Qualtro - Answer-Can pay a $300 cash dividend
The following accounting equation represents the financial position of Bentley
Company.
Based on this equation, Bentley - Answer-none
Alexis Company was started in Year 1. At the end of Year 1 the Company's had the
following accounting equation.
During Year 2, the company experienced the following accounting events.
• Paid of $500 of its note payable.
• Earned $700 of cash revenue.
• Paid $400 of cash expenses.
• Paid a $100 cash dividend. - Answer-20%
Alexis Company was started in Year 1. At the end of Year 1 the Company's had the
following accounting equation.
During Year 2, the company experienced the following accounting events.
• Paid of $500 of its note payable.
• Earned $700 of cash revenue.
• Paid $400 of cash expenses.
• Paid a $100 cash dividend.
Based on this information alone, what percent of the company's assets at the end of
Year 2 were provided by earnings? - Answer-24%
Alexis Company was started in Year 1. At the end of Year 1 the Company's had the
following accounting equation.
Answers
Morrison Company experienced a business event that had the following effect on its
accounting equation:
Assets= 25,000
Liabilities= 25,000
common stock= NA
Retained earnings= NA - Answer-Paid off debt
Daemon Company paid cash to purchase land. Which of the following shows how this
event will affect the company's accounting equation? The letters "NA" indicate that the
component of the equation is not affected. - Answer-Assets= +-
Liabilities= NA
Common stock= NA
Retained earnings= NA
Fen Company paid a $300 cash dividend. Which of the following shows how this event
will affect the company's accounting equation? The letters "NA" indicate that the
component of the equation is not affected. - Answer-Assets= 300
Liabilities= NA
Common stock= NA
Retained earnings= 300
Which of the following is a true statement? - Answer-All are true:
A cash revenue is an economic benefit that will cause assets and retained earnings to
increase.
A cash expense is an economic sacrifice that will cause assets and retained earnings to
decrease.
A cash dividend is a transfer of assets from a business to its owners that will cause the
assets and retained earnings of the business to decrease.
The accounting records of Coastal Company contained the following account balances.
Cash $ 500
Land $ 800
Notes Payable $ 200
Common Stock $ 400
, The records also contained an account titled Retained Earnings. Based on this
information the balance of the retained earnings account must be - Answer-$700
The following accounting equation represents the financial position of Qualtro Company.
Based on this equation, Qualtro - Answer-Can pay a $300 cash dividend
The following accounting equation represents the financial position of Bentley
Company.
Based on this equation, Bentley - Answer-none
Alexis Company was started in Year 1. At the end of Year 1 the Company's had the
following accounting equation.
During Year 2, the company experienced the following accounting events.
• Paid of $500 of its note payable.
• Earned $700 of cash revenue.
• Paid $400 of cash expenses.
• Paid a $100 cash dividend. - Answer-20%
Alexis Company was started in Year 1. At the end of Year 1 the Company's had the
following accounting equation.
During Year 2, the company experienced the following accounting events.
• Paid of $500 of its note payable.
• Earned $700 of cash revenue.
• Paid $400 of cash expenses.
• Paid a $100 cash dividend.
Based on this information alone, what percent of the company's assets at the end of
Year 2 were provided by earnings? - Answer-24%
Alexis Company was started in Year 1. At the end of Year 1 the Company's had the
following accounting equation.
