FA chapter 4 quick check

meli ssa
Quiz by , created 9 months ago

Quiz on FA chapter 4 quick check, created by meli ssa on 02/17/2019.

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meli ssa
Created by meli ssa 9 months ago
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Question 1

Question
Which statement is true?
Answer
  • Chairman’s letters are part of a financial statement
  • Corporate annual reports are part of a financial statement.
  • Management discussions and analysis are part of notes to the accounts.
  • Financial statements are part of corporate annual reports.

Question 2

Question
Corporate annual reports typically appear in this order:
Answer
  • Corporate information, other statements and disclosures, analysis and commentaries, and financial statements
  • Financial statements, analysis and commentaries, other statements and disclosures, and corporate information
  • Corporate information, analysis and commentaries, other statements and disclosures, and financial statements
  • . Financial statements, other statement and disclosures, analysis and commentaries, and corporate information

Question 3

Question
The first item in the analysis and commentaries section of an annual report is typically:
Answer
  • Management analysis and discussions
  • Chairman’s message/letter to shareholders
  • Auditor’s report on the company’s financial position and performance
  • Segment performance

Question 4

Question
Who is responsible for the preparation of financial statements?
Answer
  • Auditor
  • . Management
  • Chief Financial Officer (CFO) and the accounting staf
  • Chairman of the Board

Question 5

Question
Materiality means:
Answer
  • The amount in question had the potential to result in a different decision had it been known to financial statement users.
  • The amount in question is greater than 10% of total assets
  • The amount in question is greater than 10% of revenue
  • The amount in question would have resulted in a different decision had it been known to financial statement users.

Question 6

Question
IAS 1 does not require the following item to be displayed on the statement of financial position:
Answer
  • Provisions
  • Cash and cash equivalents
  • Accumulated depreciation
  • . Intangible assets

Question 7

Question
Which of the following is correct?
Answer
  • A statement of financial position contains information about how components of equity change during a period
  • An entity is not allowed to aggregate its revenue into one single line on the Income Statement
  • Entities must present their statement of comprehensive income, followed by the statement of financial position, statement of changes in equity, and, lastly, statement of cash flows.
  • Other comprehensive income items may turn a “loss” on the Income Statement into a “profit” on the statement of comprehensive income.

Question 8

Question
An entity has the following balances: Cash $15,000, Inventory $10,000, Receivables $22,000, PPE $50,000, and Intangible assets $40,000. Its total current assets are:
Answer
  • $25,000
  • . $37,000
  • . $47,000
  • . $97,000

Question 9

Question
All of the following may explain changes in equity from one period to another, except for:
Answer
  • . Additional share issuance during the period
  • Payment of dividend during the period
  • Increase in the entity’s share price during the year
  • Total comprehensive income

Question 10

Question
Which of the following statements best describes notes to the financial statements?
Answer
  • They are part of a complete set of financial statements
  • They are used to explain how the company has performed during the financial year.
  • . They provide a breakdown of all the numbers that appear on financial statements.
  • The more important numbers are shown on the financial statements and the less important ones are shown in the notes to the financial statements.