19) An investor wishes to assess a company's financial position at the end of the period. Which financial statement would the investor probably examine?
A) the cash flow statement
B) the income statement
C) the balance sheet
D) the statement of retained earnings
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
20) The balance sheet is sometimes also called the:
A) statement of operations
B) statement of cash position
C) statement of financial position
D) statement of income and expense
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
21) The cash flow statement is divided into three categories relating to cash flows from operating, investing, and:
A) management planning activities
B) financing activities
C) strategic positioning activities
D) marketing activities
Answer: B
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
22) To determine a company's gross margin for the period, an investor would look on the:
A) balance sheet
B) cash flow statement
C) income statement
D) statement of retained earnings
Answer: C
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
23) Which financial statement is based on the accounting equation?
A) statement of retained earnings
B) income statement
C) cash flow statement
D) balance sheet
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
24) The main source of cash for a business normally arises from:
A) current assets
B) operating activities
C) financing activities
D) investing activities
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
25) Gains and losses appear on which of the financial statements listed below?
A) the balance sheet