ACCT 310 Final Exam Questions
Verified And Complete Answers
\.Where must earnings per share be disclosed in the financial statements to satisfy generally
accepted accounting principles?
a. On the face of the statement of retained earnings (or, statement of stockholders' equity.)
b. In the footnotes to the financial statements.
c. On the face of the income statement.
d. On the face of the balance sheet. - Answer- c. on the face of the income statement
\.The objective of financial reporting identifies ______________ as the primary users for
general-purpose financial statements.
a. Employees
b. Managers
c. Investors and creditors
d. Regulators (IRS and SEC) - Answer- c. investors and creditors
\.Which of the following should be reported as a prior period adjustment?
Change in Estimated Lives Mistakes in the Application of
of Depreciable Assets Accounting Principles
a. Yes Yes
b. No Yes
c. Yes No
,d. No No - Answer- B. No Yes
\.The _____________ requires that members prepare financial statements in accordance with
GAAP.
a. AICPA's Code of Professional Conduct
b. Internal Revenue Service
c. Financial Accounting Standards Board
d. International Accounting Standards Board - Answer- a. AICPA's Code of Professional
Conduct
\.Which of the following is a limitation of the balance sheet?
a. Many items that are of financial value are omitted.
b. Judgments and estimates are used.
c. Current fair value is not reported.
d. All of these answer choices are correct. - Answer- d. all of the above
\.The amount of time that is expected to elapse until an asset is realized or otherwise converted
into cash is referred to as
a. solvency.
b. financial flexibility.
c. liquidity.
d. exchangeability. - Answer- c. liquidity
\.On the statement of cash flows, making and collecting loans and disposing of property, plant,
and equipment are
a. operating activities.
b. investing activities.
, c. financing activities.
d. liquidity activities. - Answer- b. investing activities
\.In preparing a statement of cash flows, cash flows from operating activities
a. are always equal to accrual accounting income.
b. are calculated as the difference between revenues and expenses.
c. can be calculated by appropriately adding to or deducting from net income those items in the
income statement that do not affect cash.
d. can be calculated by appropriately adding to or deducting from net income those items in the
income statement that do affect cash. - Answer- c. can be calculated by appropriately adding
to or deducting from net income those items in the income statement that do not affect cash.
\.Which of the following is not considered a GAAP document?
a. APB Opinions
b. AICPA Research Bulletins
c. Statement of Financial Accounting Concepts
d. FASB Standards - Answer- C. Statement of Financial Accounting Concepts
\.The Financial Accounting Standards Board Accounting Standards Codification
a. does not create new GAAP.
b. eliminates nonessential information.
c. simplifies user access to all authoritative U.S. generally accepted accounting principles.
d. all of these answer choices are correct. - Answer- d. all of the above
\.The objective of general-purpose financial reporting in the conceptual framework is
___________.
a. reliability.
Verified And Complete Answers
\.Where must earnings per share be disclosed in the financial statements to satisfy generally
accepted accounting principles?
a. On the face of the statement of retained earnings (or, statement of stockholders' equity.)
b. In the footnotes to the financial statements.
c. On the face of the income statement.
d. On the face of the balance sheet. - Answer- c. on the face of the income statement
\.The objective of financial reporting identifies ______________ as the primary users for
general-purpose financial statements.
a. Employees
b. Managers
c. Investors and creditors
d. Regulators (IRS and SEC) - Answer- c. investors and creditors
\.Which of the following should be reported as a prior period adjustment?
Change in Estimated Lives Mistakes in the Application of
of Depreciable Assets Accounting Principles
a. Yes Yes
b. No Yes
c. Yes No
,d. No No - Answer- B. No Yes
\.The _____________ requires that members prepare financial statements in accordance with
GAAP.
a. AICPA's Code of Professional Conduct
b. Internal Revenue Service
c. Financial Accounting Standards Board
d. International Accounting Standards Board - Answer- a. AICPA's Code of Professional
Conduct
\.Which of the following is a limitation of the balance sheet?
a. Many items that are of financial value are omitted.
b. Judgments and estimates are used.
c. Current fair value is not reported.
d. All of these answer choices are correct. - Answer- d. all of the above
\.The amount of time that is expected to elapse until an asset is realized or otherwise converted
into cash is referred to as
a. solvency.
b. financial flexibility.
c. liquidity.
d. exchangeability. - Answer- c. liquidity
\.On the statement of cash flows, making and collecting loans and disposing of property, plant,
and equipment are
a. operating activities.
b. investing activities.
, c. financing activities.
d. liquidity activities. - Answer- b. investing activities
\.In preparing a statement of cash flows, cash flows from operating activities
a. are always equal to accrual accounting income.
b. are calculated as the difference between revenues and expenses.
c. can be calculated by appropriately adding to or deducting from net income those items in the
income statement that do not affect cash.
d. can be calculated by appropriately adding to or deducting from net income those items in the
income statement that do affect cash. - Answer- c. can be calculated by appropriately adding
to or deducting from net income those items in the income statement that do not affect cash.
\.Which of the following is not considered a GAAP document?
a. APB Opinions
b. AICPA Research Bulletins
c. Statement of Financial Accounting Concepts
d. FASB Standards - Answer- C. Statement of Financial Accounting Concepts
\.The Financial Accounting Standards Board Accounting Standards Codification
a. does not create new GAAP.
b. eliminates nonessential information.
c. simplifies user access to all authoritative U.S. generally accepted accounting principles.
d. all of these answer choices are correct. - Answer- d. all of the above
\.The objective of general-purpose financial reporting in the conceptual framework is
___________.
a. reliability.
