Answer: TRUE
Diff: 2 Type: TF
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
77) The accounting equation must always be in balance.
Answer: TRUE
Diff: 1 Type: TF
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
78) The statement of retained earning discloses the amount of dividends declared during the year.
Answer: TRUE
Diff: 1 Type: TF
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
79) The statement of cash flows categorizes the sources and uses of the net cash flow generated by the company during the year.
Answer: TRUE
Diff: 1 Type: TF
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
80) Expenses are increases in retained earnings that result from operations.
Answer: FALSE
Diff: 2 Type: TF
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
81) For business purposes, dividend payments are classified as expenses.
Answer: FALSE
Diff: 2 Type: TF
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
82) Revenues less cash outflow equals net income (or net loss).
Answer: FALSE
Diff: 1 Type: TF
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
83) The Cash Flow Statement is organized in terms of the organization's operating, investing, and financing activities.
Answer: TRUE
Diff: 2 Type: TF
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
84) The payment of interest is a financing activity.
Answer: FALSE
Explanation: The payment of interest (under ASPE) is an operating activity.
Diff: 2 Type: TF