Answer: D
Diff: 2 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
56) Decreases in shareholders' equity result from:
A) owner investments
B) a net loss during the period
C) a net income during the period
D) owner investments and a net loss during the period
Answer: B
Diff: 2 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
57) Purchases and sales of non-current assets are examples of:
A) investing activities
B) dividend activities
C) financing activities
D) operating activities
Answer: A
Diff: 2 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
58) Cash spent to purchase a new building would appear on the cash flow statement as:
A) a financing activity
B) an operating activity
C) an investing activity
D) a dividend activity
Answer: C
Diff: 2 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
59) The payment of the chief financial officer's salary would appear:
A) on the cash flow statement with the operating activities
B) on the balance sheet with the current liabilities
C) on the income statement with the revenues
D) on the income statement as part of cost of goods sold
Answer: A
Diff: 3 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
60) Which of the following financial statements shows the net increase or decrease in cash during the period?
A) balance sheet
B) income statement
C) statement of retained earnings
D) cash flow statement
Answer: D
Diff: 1 Type: MC
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to support reliable financial reporting
61) Which of the following statements should be prepared before the balance sheet is prepared?
A) statement of retained earnings
B) cash flow statement
C) statement of financial position
D) income statement
Answer: A
Diff: 3 Type: MC