FAR — Financial Accounting & Reporting — Quiz 10

Questions in this quiz (10)

1. Which qualitative characteristic allows users to identify similarities and differences between companies?

   • Timeliness
   • Comparability
   • Neutrality
   • Verifiability

2. Which transaction would increase both assets and equity?

   • Receiving cash from customers for services provided
   • Borrowing money from a bank
   • Paying dividends
   • Purchasing inventory on credit

3. Which financial reporting concept requires financial information to be unbiased?

   • Relevance
   • Neutrality
   • Comparability
   • Consistency

4. Which financial statement reports cash flows from operating, investing, and financing activities?

   • Income statement
   • Balance sheet
   • Statement of cash flows
   • Statement of retained earnings

5. Which accounting principle requires disclosure of important financial information?

   • Matching principle
   • Revenue recognition principle
   • Full disclosure principle
   • Conservatism principle

6. Which financial statement element represents claims by creditors?

   • Equity
   • Liabilities
   • Revenue
   • Expenses

7. Which accounting assumption assumes a business will continue operating indefinitely?

   • Periodicity assumption
   • Monetary unit assumption
   • Going concern assumption
   • Economic entity assumption

8. Which accounting method recognizes revenues and expenses when they occur?

   • Cash basis accounting
   • Accrual accounting
   • Matching principle
   • Periodicity assumption

9. Which transaction decreases both assets and liabilities?

   • Paying accounts payable with cash
   • Issuing stock for cash
   • Recording revenue
   • Borrowing money

10. Which accounting principle requires assets to be recorded at acquisition cost?

    • Matching principle
    • Historical cost principle
    • Revenue recognition principle
    • Full disclosure principle