Week 1 - Practice Quiz

Question 1

An investment group is looking to invest some money into a company. Where should the investment group look for relevant information about the company’s performance?

Answer 1

The company’s Financial Books

Question 2

A U.S. company is preparing its financial books to file with the Securities and Exchange Commission. Which of the following should direct the preparation of the company’s financial books?

Answer 2

U.S. Generally Accepted Accounting Principles (GAAP)

Question 3

A European Union-based company is preparing its financial books. Which of the following should direct the preparation of the company’s financial books?

Answer 3

International Financial Reporting Standards (IFRS)

Question 4

Near the end of a fiscal period, a company is working on reporting its financial position, to share with investors and creditors. Which financial statement should the company use to report this information?

Answer 4

Balance Sheet

Question 5

A company is working on reporting its net earnings for a fiscal period, to share with investors and creditors. Which financial statement should the company use to report this information?

Answer 5

Income Statement

Question 6

A company is working on reporting changes in the company’s cash balance during a fiscal period, to share with investors and creditors. Which financial statement should the company use to report this information?

Answer 6

Statement of Cash Flows

Question 7

A company purchases inventory they hope to resell to customers. In which of the following Balance Sheet accounts should the company record the inventory purchased?

Answer 7

Asset account

Question 8

A company delivers inventory to a customer who will pay for it next month. In which of the following Balance Sheet accounts should the company record the amount it is owed by the customer?

Answer 8

Asset account

Question 9

A company purchases inventory from its supplier this month and will pay its supplier next month. In which of the following Balance Sheet accounts should the company record the obligation to pay its supplier?

Answer 9

Liability account

Question 10

A company obtains a 5-year loan from a bank. In which of the following Balance Sheet accounts should the company record the obligation to repay the loan?

Answer 10

Liability account

Question 11

A company issues some capital stock to investors. In which of the following Balance Sheet accounts should the company record the change in capital stock?

Answer 11

Owners’ Equity account

Question 12

A company buys back some of its stock from investors. In which of the following Balance Sheet accounts should the company record the change in treasury stock?

Answer 12

Owners’ Equity account