Financial Reporting Concepts Quiz
Test your knowledge of key financial reporting concepts. All questions are required. Please answer each item to the best of your ability.
Which of the following is a primary objective of financial reporting?
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To provide information useful for making investment and credit decisions
To determine tax liability
To set company policies
To manage employee performance
Which statement best describes accrual accounting?
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Revenue and expenses are recognized when earned or incurred, regardless of cash flow
Revenue and expenses are recognized only when cash changes hands
Only revenues are recognized when received
Only expenses are recognized when paid
Which financial statement shows a company’s financial position at a specific point in time?
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Balance Sheet
Income Statement
Statement of Cash Flows
Statement of Changes in Equity
The matching principle requires that:
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Expenses are recognized in the same period as the revenues they help generate
All expenses are recognized when paid
Revenues are matched to cash receipts
Assets are matched to liabilities
On a scale from 1 (Strongly Disagree) to 5 (Strongly Agree), rate your agreement: 'Financial statements prepared under GAAP are comparable across companies.'
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Strongly Disagree
1
2
3
4
Strongly Agree
5
1 is Strongly Disagree, 5 is Strongly Agree
Which of the following is NOT classified as a current asset?
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Inventory
Accounts Receivable
Prepaid Expenses
Equipment
IFRS stands for:
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International Financial Reporting Standards
Internal Fiscal Reporting System
International Fiscal Regulation Standards
Internal Financial Reporting Standards
Which concept requires that financial information be complete, neutral, and free from error?
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Faithful Representation
Materiality
Going Concern
Cost Principle
Please indicate whether each item is classified as an asset, liability, or equity on the balance sheet.
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Rows
Asset
Liability
Equity
Accounts Payable
1
2
3
Common Stock
4
5
6
Cash
7
8
9
Notes Payable
10
11
12
Which of the following best describes the going concern assumption?
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A business will continue operating in the foreseeable future
A business will liquidate all assets within a year
A business must match expenses to revenues
A business prepares financial statements yearly
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