CFI
FMVA
/
EXAM
/
QUESTIONS
/
WITH CORRECT ANSWERS
/ / /
Income /statement /accounting /- /verified /answer(s)-
✔✔Accrual /-
/revenues /& /costs /recorded /as /a /business /earns /or /incurs /them, /not /as
/it /receives /and /pays /money
It
/includes
/them
/in
/the
/relevant
/period's /income /statement /and /matches /them /as /closely /as /possible
CF /makes /no /difference /whatsoever /- /IS /where /sale /happens
=>
/How
/do
/you
/decide
/when
/sale
/happens?
/RECOGNIZE /REV /UPON /DELIVERY /OF /GOOD/SERVICE /PERFORMED
,Why
/are /profits /and /cash /flow /not /the /same /thing? /- /verified /answer(s)-
✔✔Accounting /differences
The /idea /of /matching /over /time /- /verified /answer(s)-✔✔
CFS /Accounting /- /verified /answer(s)-
✔✔Only /records /transactions /when /cash /is /received
VS
IS /records /ALL /revenues /earned, /whether /in /cash /or /accrued
Cash /accounting /method /- /verified /answer(s)-
✔✔record
/income /and /expenditures /at /the /time /the /money /changes /hands
Cash /accounting /method /- /verified /answer(s)-
✔✔An
/accounting
/method
/in
/which
/income
/and
/expenditures /are /recorded /at /the /time /the /money /changes /hands.
Accrual /Accounting /- /verified /answer(s)-
✔✔recording
/in
/each
/fiscal
/period /applicable /expenses, /whether /paid /or /not, /and /income /earned,
/whether /collected /or /not.
,Accrual /Basis /Accounting /- /verified /answer(s)-
✔✔reporting
/income /when /it /is /earned /and /expenses /when /they /are /incurred
Accrual /Basis /Accounting /- /verified /answer(s)-
✔✔the
/method
/of
/accounting
/that
/recognizes
/revenue
/when /it /is /earned /and /matches /expenses /to /the /revenues /they /helped
/produce
Accrual /Basis /Accounting /- /verified /answer(s)-
✔✔Accounting
/basis
/in
/which
/companies
/record,
/in
/the
/periods
/in
/which
/the
/events
/occur,
/transactions
/that
/change /
a /company's /financial /statements, /even /if /cash /was /not /exchanged.
, accrued /expenses /- /verified /answer(s)-
✔✔expenses
/incurred /in /one /fiscal /period /but /not /paid /until /a /later /fiscal /period
accrued /expenses /- /verified /answer(s)-
✔✔expenses /incurred /but /not /yet /paid /in /cash /or /recorded
Cash /flow /from /operating /activities /- /verified /answer(s)-
✔✔The /net /amount /of /cash /provided /from /operating /activities.
cash /flow /from /financing /activities /- /verified /answer(s)-✔✔
The /idea /of /matching /over /time /- /verified /answer(s)-✔✔
CFS /Accounting /- /verified /answer(s)-
✔✔Only /records /transactions /when /cash /is /received
VS
IS /records /ALL /revenues /earned, /whether /in /cash /or /accrued
Cash /accounting /method /- /verified /answer(s)-
✔✔record
/income /and /expenditures /at /the /time /the /money /changes /hands
Cash /accounting /method /- /verified /answer(s)-
✔✔An
/accounting
/method
/in
/which
/income
/and
/expenditures /are /recorded /at /the /time /the /money /changes /hands.
FMVA
/
EXAM
/
QUESTIONS
/
WITH CORRECT ANSWERS
/ / /
Income /statement /accounting /- /verified /answer(s)-
✔✔Accrual /-
/revenues /& /costs /recorded /as /a /business /earns /or /incurs /them, /not /as
/it /receives /and /pays /money
It
/includes
/them
/in
/the
/relevant
/period's /income /statement /and /matches /them /as /closely /as /possible
CF /makes /no /difference /whatsoever /- /IS /where /sale /happens
=>
/How
/do
/you
/decide
/when
/sale
/happens?
/RECOGNIZE /REV /UPON /DELIVERY /OF /GOOD/SERVICE /PERFORMED
,Why
/are /profits /and /cash /flow /not /the /same /thing? /- /verified /answer(s)-
✔✔Accounting /differences
The /idea /of /matching /over /time /- /verified /answer(s)-✔✔
CFS /Accounting /- /verified /answer(s)-
✔✔Only /records /transactions /when /cash /is /received
VS
IS /records /ALL /revenues /earned, /whether /in /cash /or /accrued
Cash /accounting /method /- /verified /answer(s)-
✔✔record
/income /and /expenditures /at /the /time /the /money /changes /hands
Cash /accounting /method /- /verified /answer(s)-
✔✔An
/accounting
/method
/in
/which
/income
/and
/expenditures /are /recorded /at /the /time /the /money /changes /hands.
Accrual /Accounting /- /verified /answer(s)-
✔✔recording
/in
/each
/fiscal
/period /applicable /expenses, /whether /paid /or /not, /and /income /earned,
/whether /collected /or /not.
,Accrual /Basis /Accounting /- /verified /answer(s)-
✔✔reporting
/income /when /it /is /earned /and /expenses /when /they /are /incurred
Accrual /Basis /Accounting /- /verified /answer(s)-
✔✔the
/method
/of
/accounting
/that
/recognizes
/revenue
/when /it /is /earned /and /matches /expenses /to /the /revenues /they /helped
/produce
Accrual /Basis /Accounting /- /verified /answer(s)-
✔✔Accounting
/basis
/in
/which
/companies
/record,
/in
/the
/periods
/in
/which
/the
/events
/occur,
/transactions
/that
/change /
a /company's /financial /statements, /even /if /cash /was /not /exchanged.
, accrued /expenses /- /verified /answer(s)-
✔✔expenses
/incurred /in /one /fiscal /period /but /not /paid /until /a /later /fiscal /period
accrued /expenses /- /verified /answer(s)-
✔✔expenses /incurred /but /not /yet /paid /in /cash /or /recorded
Cash /flow /from /operating /activities /- /verified /answer(s)-
✔✔The /net /amount /of /cash /provided /from /operating /activities.
cash /flow /from /financing /activities /- /verified /answer(s)-✔✔
The /idea /of /matching /over /time /- /verified /answer(s)-✔✔
CFS /Accounting /- /verified /answer(s)-
✔✔Only /records /transactions /when /cash /is /received
VS
IS /records /ALL /revenues /earned, /whether /in /cash /or /accrued
Cash /accounting /method /- /verified /answer(s)-
✔✔record
/income /and /expenditures /at /the /time /the /money /changes /hands
Cash /accounting /method /- /verified /answer(s)-
✔✔An
/accounting
/method
/in
/which
/income
/and
/expenditures /are /recorded /at /the /time /the /money /changes /hands.
