CFA Level 1 Financial Reporting and
Analysis (FRA) Top 100 practice questions
1. Which financial statement presents a company's financial position at a
specific point in time? Answer: Balance Sheet
2. What is the fundamental accounting equation? Answer: Assets = Liabilities +
Equity
3. Which financial statement reports a company's performance over a period of
time? Answer: Income Statement
4. What is the formula for net income? Answer: Revenues - Expenses
5. Which financial statement shows the movement of cash both into and out of
a company over a period of time? Answer: Statement of Cash Flows
6. What are the three main sections of the statement of cash flows? Answer:
Operating Activities, Investing Activities, and Financing Activities
7. What accounting principle states that expenses should be recognized in the
same period as the revenues they help to generate? Answer: Matching Principle
, 8. What accounting principle assumes that a company will continue to operate
as a going concern in the foreseeable future? Answer: Going Concern
Assumption
9. What is the historical cost principle? Answer: Assets are recorded at their
original cost.
10. What is fair value? Answer: The price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
11. What are current assets? Answer: Assets expected to be converted to cash or
used up within one year or one operating cycle, whichever is longer.
12. Give examples of current assets. Answer: Cash, Accounts Receivable,
Inventory, Prepaid Expenses
13. What are non-current assets? Answer: Assets not expected to be converted
to cash or used up within one year or one operating cycle.
14. Give examples of non-current assets. Answer: Property, Plant, and Equipment
(PP&E), Intangible Assets, Long-term Investments
Analysis (FRA) Top 100 practice questions
1. Which financial statement presents a company's financial position at a
specific point in time? Answer: Balance Sheet
2. What is the fundamental accounting equation? Answer: Assets = Liabilities +
Equity
3. Which financial statement reports a company's performance over a period of
time? Answer: Income Statement
4. What is the formula for net income? Answer: Revenues - Expenses
5. Which financial statement shows the movement of cash both into and out of
a company over a period of time? Answer: Statement of Cash Flows
6. What are the three main sections of the statement of cash flows? Answer:
Operating Activities, Investing Activities, and Financing Activities
7. What accounting principle states that expenses should be recognized in the
same period as the revenues they help to generate? Answer: Matching Principle
, 8. What accounting principle assumes that a company will continue to operate
as a going concern in the foreseeable future? Answer: Going Concern
Assumption
9. What is the historical cost principle? Answer: Assets are recorded at their
original cost.
10. What is fair value? Answer: The price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
11. What are current assets? Answer: Assets expected to be converted to cash or
used up within one year or one operating cycle, whichever is longer.
12. Give examples of current assets. Answer: Cash, Accounts Receivable,
Inventory, Prepaid Expenses
13. What are non-current assets? Answer: Assets not expected to be converted
to cash or used up within one year or one operating cycle.
14. Give examples of non-current assets. Answer: Property, Plant, and Equipment
(PP&E), Intangible Assets, Long-term Investments
