1
C213 Pre-Assessment Questions with Answers (100% Correct
Answers)
What does accounting focus on? —ANS: The impact a business's activities have on its
overall financial performance
Which report summarizes cash collections and cash expenditures from operating,
investing, and financing activities over a period of time? —ANS: Statement of cash
flows
Which users would have a primary concern with an organization's ability to provide
healthcare benefits? —ANS: Employees
Which benefit does a corporation gain by following Generally Accepted Accounting
Principles (GAAP)? —ANS: An increase in its comparability to other companies
Which body regulates a certified public accounting firm's audit practices when the firm
is auditing a large publicly traded company? —ANS: The Public Company
Accounting Oversight Board (PCAOB)
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What has had the most significant impact on accounting practices? —ANS:
Information technology
What two items of information are revealed on the balance sheet? —ANS: Ownership
and Debt
Which term is defined as the residual interest in the net assets of a company? —ANS:
Owner's equity
Which situation should result in revenue recognition on the income statement for the
year ending 12/31/14 if the firm is using accrual-basis accounting? —ANS: In 2014, a
company provides services to a customer for which cash will be collected the next year
(2015).
Which category on the statement of cash flows summarizes cash receipts and payments
to owners and creditors of the company? —ANS: Cash flows from financing activities
Where would an investor find a summary of a company's significant accounting
policies? —ANS: In the notes to financial statements
Which assurance does an external audit report provide for its readers? —ANS: The
company's financial statements fairly reflect its financial position
© 2025 All rights reserved
, 3
Reliable —ANS: Information that can be verified
Relevant —ANS: Information having to do with the matter at hand
Material —ANS: Information that is important enough to make a difference
Conservatism —ANS: Information related to recognizing losses as they occur
Decision Cycle steps —ANS: Prepare financial statements
Analyze financial statements
Gather information
Make decision
Implement decision
Partial financial information for a company is as follows:
Current assets$36,543
Total assets$58,719
Current liabilities$24,824
Total liabilities$48,561
Stockholders' equity$10,158
Sales$46,997
© 2025 All rights reserved
C213 Pre-Assessment Questions with Answers (100% Correct
Answers)
What does accounting focus on? —ANS: The impact a business's activities have on its
overall financial performance
Which report summarizes cash collections and cash expenditures from operating,
investing, and financing activities over a period of time? —ANS: Statement of cash
flows
Which users would have a primary concern with an organization's ability to provide
healthcare benefits? —ANS: Employees
Which benefit does a corporation gain by following Generally Accepted Accounting
Principles (GAAP)? —ANS: An increase in its comparability to other companies
Which body regulates a certified public accounting firm's audit practices when the firm
is auditing a large publicly traded company? —ANS: The Public Company
Accounting Oversight Board (PCAOB)
© 2025 All rights reserved
,2
What has had the most significant impact on accounting practices? —ANS:
Information technology
What two items of information are revealed on the balance sheet? —ANS: Ownership
and Debt
Which term is defined as the residual interest in the net assets of a company? —ANS:
Owner's equity
Which situation should result in revenue recognition on the income statement for the
year ending 12/31/14 if the firm is using accrual-basis accounting? —ANS: In 2014, a
company provides services to a customer for which cash will be collected the next year
(2015).
Which category on the statement of cash flows summarizes cash receipts and payments
to owners and creditors of the company? —ANS: Cash flows from financing activities
Where would an investor find a summary of a company's significant accounting
policies? —ANS: In the notes to financial statements
Which assurance does an external audit report provide for its readers? —ANS: The
company's financial statements fairly reflect its financial position
© 2025 All rights reserved
, 3
Reliable —ANS: Information that can be verified
Relevant —ANS: Information having to do with the matter at hand
Material —ANS: Information that is important enough to make a difference
Conservatism —ANS: Information related to recognizing losses as they occur
Decision Cycle steps —ANS: Prepare financial statements
Analyze financial statements
Gather information
Make decision
Implement decision
Partial financial information for a company is as follows:
Current assets$36,543
Total assets$58,719
Current liabilities$24,824
Total liabilities$48,561
Stockholders' equity$10,158
Sales$46,997
© 2025 All rights reserved
