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    ACCA FA1 Practice Question 1

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    arslan.ahmed8179
    The document contains 20 multiple choice questions testing accounting concepts and knowledge of financial statements. Key topics covered include the accrual vs cash method of accounting, components of financial statements like the balance sheet and income statement, and required notes and disclosures. Correct answers are provided for the accrual method, adjusting journal entries, FASB as the developer of GAAP, and the income statement allowing determination of gross margin for a retailer.

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    ACCA FA1 Practice Question 1

    Uploaded by

    arslan.ahmed8179
    62 views5 pages
    The document contains 20 multiple choice questions testing accounting concepts and knowledge of financial statements. Key topics covered include the accrual vs cash method of accounting, components of financial statements like the balance sheet and income statement, and required notes and disclosures. Correct answers are provided for the accrual method, adjusting journal entries, FASB as the developer of GAAP, and the income statement allowing determination of gross margin for a retailer.

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    ACCA FA1 Practice Question

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    The document contains 20 multiple choice questions testing accounting concepts and knowledge of financial statements. Key topics covered include the accrual vs cash method of accounting, components of financial statements like the balance sheet and income statement, and required notes and disclosures. Correct answers are provided for the accrual method, adjusting journal entries, FASB as the developer of GAAP, and the income statement allowing determination of gross margin for a retailer.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    62 views5 pages

    ACCA FA1 Practice Question 1

    Uploaded by

    arslan.ahmed8179
    The document contains 20 multiple choice questions testing accounting concepts and knowledge of financial statements. Key topics covered include the accrual vs cash method of accounting, components of financial statements like the balance sheet and income statement, and required notes and disclosures. Correct answers are provided for the accrual method, adjusting journal entries, FASB as the developer of GAAP, and the income statement allowing determination of gross margin for a retailer.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    1.

    Which accounting method will result in financial statements that report a


    more complete picture of a corporation’s financial position and a better
    measure of profitability during a recent accounting year?

    Accrual Method

    Cash Method

    2. Which type of journal entries are made at the end of each accounting
    period so that the financial statements better reflect the accrual method
    of accounting?

    Adjusting

    Closing

    Reversing

    3. The generally accepted accounting principles used in the financial


    statements of U.S corporations are researched and developed by which
    organization?

    American Accounting Association (AAA)

    Financial Accounting Standards Board (FASB)

    Internal Revenue Service (IRS)

    4. Which financial statement will allow you to determine the gross margin for
    a retailer or manufacturer?

    Balance Sheet

    Income Statement

    Statement Of Cash Flows

    Statement Of Comprehensive Income

    Statement Of Stockholders’ Equity

    5. Does the heading of a balance sheet indicate a period of time or a point in


    time?

    Period Of Time
    Point In Time

    6. A corporation's net income will cause a change in which component of


    stockholders' equity?

    Accumulated Other Comprehensive Income

    Paid-in Capital

    Retained Earnings
    7. Which financial statement's structure is closest to that of the basic
    accounting equation?

    Balance Sheet

    Income Statement

    Statement Of Cash Flows

    Statement Of Comprehensive Income

    Statement Of Stockholders’ Equity

    8. Is it true or false that a grocery store’s sale of its old delivery van to one of
    its employees for $2,000 should be recorded in the general ledger
    account Sales?

    True

    False

    9. Is it true or false that the total amount of stockholders’ equity reported on


    the balance sheet is intended to show the fair market value of the
    corporation?

    True

    False

    10.Comprehensive income is defined as _______________ plus other comprehensive


    income.

    Extraordinary Items

    Gains And Losses


    Net Income

    11.Which financial statement reports the adjustments for foreign currency


    translation?

    Statement Of Cash Flows

    Statement Of Comprehensive Income

    Statement Of Income

    12.Ten years ago, a corporation started a new brand name that is now
    considered to be its most valuable asset. On which financial statement
    and at what amount will you see the brand name reported?

    Balance Sheet At Its Present Value

    Statement Of Comprehensive Income With No Value

    Not Reported On A Financial Statement


    13.A corporation's working capital is calculated using which amounts?

    Total Assets and Total Liabilities

    Total Assets and Current Liabilities

    Current Assets and Current Liabilities

    14.The changes that occurred during a recent year in the accounts Retained
    Earnings and Treasury Stock will be found in which financial statement?

    Balance Sheet

    Income Statement

    Statement Of Cash Flows

    Statement Of Comprehensive Income

    Statement Of Stockholders’ Equity

    15.The amount spent for capital expenditures will be reported in which section of
    the statement of cash flows?

    Cash Provided/used In Financing Activities


    Cash Provided/used In Investing Activities

    Cash Provided/used In Operating Activities

    Supplemental Information

    16.Which of the following will appear as a negative amount on a statement of


    cash flows that was prepared using the indirect method?

    A Decrease In Inventory

    An Increase In Accounts Payable

    An Increase In Accounts Receivable

    Depreciation Expense

    17.Which of the following will appear as a positive amount on a statement of


    cash flows that was prepared using the indirect method?

    An Increase In Accounts Receivable

    An Increase In Inventory

    A Decrease In Accounts Payable

    Depreciation Expense
    18.What is usually presented first in the notes to the financial statements?

    Accumulated Other Comprehensive Income

    Commitments And Contingencies

    Significant Accounting Policies

    19.Which is the annual report to the SEC that contains the financial
    statements of a publicly-traded corporation?

    Form 1040

    Form 10-K

    Form 10-Q

    Schedule C
    20.Important disclosures regarding likely losses that could not be estimated
    are found where?

    General Ledger Accounts

    Income Statement

    Notes To The Financial Statements

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