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Q1. This course includes _ modules.
Q2. I am required to purchase a textbook for this course.
Q3. Which of the following activities is NOT required in each module?
Q4. The following tool(s) will help me use the discussion forums:
Q5. If I have a problem in the course I should:
Q1. Revenue should only increase once the company has received a cash payment. True or false?
Q2. The income statement addresses the measurement question, “What do you own?” True or false?
Q1. Cost of goods sold refers to the cost of inventory being exchanged for payment when the inventory item is sold. True or false?
Q2. A company must choose a cost flow assumption for determining cost of goods sold based on the physical flow of goods. True or false?
Q1. What is the measurement question that is not answered by the balance sheet but can be answered by looking at the income statement?
Q2. What financial statement looks at what occurred during a period of time that changed the company’s financial position?
Q3. Which account would be found on the income statement?
Q4. Say you buy a sandwich from a shop. The shop’s revenue is an increase in assets or a decrease in liabilities brought about by a normal activity for the shop. True or false?
Q5. Revenue has to be brought about by an activity that is central to the company’s normal operations. True or false?
Q6. What is revenue minus cost of goods sold equal to?
Q7. Income taxes are deducted to calculate net income. True or false?
Q8. An athletic apparel store that sells you a cupcake would report that money as revenue on its financial statements. True or false?
Q9. The income statement represents a substitute attribute for a company’s what?
Q10. What are the “goods” defined as in “cost of goods sold”?
Q11. There is no relationship between cost of goods sold and inventory. True or false?
Q12. The total cost of goods available for sale can be thought of as the cost of inventory that was sold during the year plus the cost of inventory that wasn’t sold left on the balance sheet as inventory. True or false?
Q13. Which is NOT a cost flow assumption?
Q14. What is an important indicator of the company’s performance and future prospects?
Q15. The cost flow assumption that a company adopts need not match the physical flow of goods. True or false?
Q16. If a company has a large gross profit, it might suggest what about the company?
Q17. What is another name for cost of goods sold that might appear instead on the income statement?
Q18. If a company adopts a FIFO cost flow assumption and sells only one item during the year, the cost of the first item of inventory it acquired would be the cost used on the financial statements, regardless of whether the item acquired first was the one actually sold. True or false?
Q19. How would a company assign costs when using the average cost assumption?
Q20. Cost of goods sold is found on both the balance sheet and income statement. True or false?
Q1. Depreciation expense allocates the cost of an asset over the periods a company expects to use the asset. True or false?
Q2. Depreciation expense represents an allocation of a portion of the asset’s total cost to the period covered by the income statement. True or false?
Q1. The statement of cash flows documents how net income has changed from the beginning of the period to the end of the period. True or false?
Q2. The indirect approach to preparing the statement of cash flows uses net income to derive cash flows from investing activities. True or false?
Q1. What represents outlays of resources as part of normal operating activities?
Q2. Expenses are associated with operating transactions that …
Q3. An employee working at the store gets wages that will be shown as an expense on the income statement. True or false?
Q4. Advertising expense would not be shown on the income statement but rather on the balance sheet only. True or false?
Q5. Which is an example of an expense that a company might incur?
Q6. An expensive mixer at a bakery is an example of an item that the company would not expense in the year it purchases the mixer, but rather depreciate over a set number of years. True or false?
Q7. What would be recorded on the income statement if a bakery sold one of the two mixers it uses to prepare cookie dough and cake batter?
Q8. Depreciation expense allows a company to spread the cost of an asset over the periods it expects to benefit from the asset. True or false?
Q9. What is a gain or loss that arises from events that are both unusual AND infrequent, where unusual means that the event could be judged as unforeseen?
Q10. What account on the income statement often serves as a summary measure for a company’s performance?
Q11. Which is an activity that could indicate a company would have other comprehensive income?
Q12. Even if a company has no other comprehensive income, the company still has to prepare a statement of comprehensive income. True or false?
Q13. Which financial statement tells us the story of how the company’s cash position changed from the beginning of the period to the end of the period?
Q14. “Cash flow” refers to cash leaving the company or arriving into the company as a result of transactions or events. True or false?
Q15. Which is NOT one of the three sections on the cash flow statement?
Q16. When using the indirect method, there are adjustments on the statement of cash flows for items that affect net income but don’t affect cash. True or false?
Q17. Which is an adjustment found on the operating activities section of the statement of cash flows?
Items that affect net income but don’t affect cash
Items that affect net income and cash but aren’t related to operating activities
Timing differences between transactions’ effect on net income and their effect on cash
All of the above
Q18. Which activity on the statement of cash flows relates to the impact of transactions associated with the company’s long-term assets?
Q19. Which activity on the statement of cash flows relates to the impact of transactions associated with the company’s long-term liabilities or its equity?
Q20. At the bottom of the cash flow statement, there is a sum of cash inflows and outflows of all three sections. True or False?
Q1. Loss contingencies should be included as a liability on the balance sheet if they can be estimated. True or false?
Q2. Gain contingencies should not be included as an asset on the balance sheet. True or false?
Q1. An auditor’s report that includes a qualified opinion is more desirable than a report that includes an unqualified opinion. True or false?
Q2. Not all companies’ financial statements are required to include an auditor’s opinion. True or False?
Q1. Financial statement notes usually accompany financial statements and usually appear after the statement of cash flows. True or false?
Q2. Where would a company disclose the cost assumption of FIFO on their financials?
Q3. There are some notes that are required to be reported by companies.
Q4. The note labeled “summary of significant accounting policies” would include the assumption about what flow of inventory the company uses when determining cost of goods sold. True or false?
Q5. Where would the type of depreciation the company uses be disclosed?
Q6. If something significant and relevant happens to the company after the fiscal year end, but before the financial statements are issued, where should the company report it on the financials?
Q7. A contingent liability depends on the outcome of some future event. True or false?
Q8. What companies are required to produce an auditor’s report?
Q9. The auditor’s report is a formal opinion regarding a set of financial statements written by whom?
Q10. Notes on most company’s financial statements have declined over the years. True or false?
Q11. The auditor’s report may include which of the following elements?
Q12. A company with a clean auditor’s report means that investors should invest in the company. True or false?
Q13. The public can use the auditor’s report to learn that the financials are a fair representation of the company. True or false?
Q14. Which should be disclosed by a company in its notes?
Q15. What are reasons why there are more notes disclosed by companies now as compared to the past?
Q16. The auditor’s signature is included in the auditor’s report. True or false?
Q17. Disclosures in notes can be a means for a company to manage its own risk as it relates to informing readers of risks. True or false?
Q18. A contingency loss should be recorded as a liability on the balance sheet if what?
Q19. A contingency loss should only be presented as a disclosure in the notes if what?
Q20. Companies want to get a qualified opinion on their financial statements, not an unqualified opinion. True or false
Q1. Risk ratios are most helpful in analyzing the performance of the company. True or false?
Q2. Interpreting the outcome of a ratio analysis is made easier with the use of benchmarks. True or false?
Q1. The statement of cash flows is similar to the balance sheet because it considers how the company’s cash has changed. True or false?
Q2. The company’s financial statements are designed with decision makers inside the company primarily in mind. True or false?
Q1. Comparing different companies’ net incomes but nothing else can give you a clear picture of who is doing well. True or false?
Q2. What profitability ratio divides net income by the average total assets?
Q3. Which profitability ratio indicates the amount of net income earned for each share of common stock outstanding?
Q4. Companies whose stock is sold on public exchanges are NOT required to report earnings per share on their income statements. True or false?
Q5. Financial ratios are useful when comparing companies that are different sizes or in different industries. True or false?
Q6. What risk ratio would indicate a company’s ability to meet its liabilities by using its current assets?
Q7. Accounting is fundamentally about measurement. True or false?
Q8. The cash flow statement shows how one balance sheet item changed from the beginning to the end of the period. True or false?
Q9. What financial statement would tell you what events or transactions increased assets or decreased liabilities, or decreased assets or increased liabilities?
Q10. A company’s financial performance can be represented through the balance sheet. True or false?
Q11. A company’s assets and liabilities are presented on the balance sheet. True or false?
Q12. A company’s revenue and expenses are reported in which financial statement?
Q13. The balance sheet is a representation of the company’s what?
Q14. Detail about a company’s operating, investment, and financing activities can be found on which financial statement?
Q15. Notes can be an important part of understanding the financial statements. True or false?
Q16. When deciding between two companies to invest in, you only need to look at each company’s cash and choose the larger of the two. True or false?
Q17. Benchmarks of ratios can help us analyze companies against each other and a standard. True or false?
Q18. Which is one way that ratios can be helpful?
Q19. EPS stands for what?
Q20. The income statement is a snapshot of the position of the company. True or false?
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This course is intended for audiences of all experiences who are interested in learning about new skills in a business context; there are no prerequisite courses.