FAR — Financial Accounting & Reporting — Quiz 8

Questions in this quiz (10)

1. Which of the following transactions increases one asset and decreases another asset without affecting liabilities or equity?

   • Purchasing inventory with cash
   • Issuing stock for cash
   • Borrowing money from a bank
   • Recording service revenue

2. Which financial statement element represents decreases in equity resulting from operating activities?

   • Liability
   • Expense
   • Asset
   • Dividend

3. Which qualitative characteristic requires financial information to be free from bias?

   • Comparability
   • Neutrality
   • Timeliness
   • Relevance

4. Which transaction increases both assets and revenues?

   • Providing services and receiving cash
   • Borrowing cash from a bank
   • Issuing common stock
   • Paying operating expenses

5. Which financial statement element represents distributions to shareholders?

   • Expenses
   • Dividends
   • Liabilities
   • Gains

6. Which qualitative characteristic helps users compare financial information across periods?

   • Consistency
   • Verifiability
   • Relevance
   • Timeliness

7. Which financial statement reports a company's results of operations for a period?

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

8. Which accounting assumption requires transactions to be recorded in a stable currency?

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

9. Which financial statement element represents increases in equity from owner investments?

   • Revenue
   • Capital contributions
   • Gains
   • Liabilities

10. Which concept allows companies to prepare financial reports for specific time periods?

    • Economic entity assumption
    • Periodicity assumption
    • Matching principle
    • Cost principle