1. Which financial statement shows the assets, liabilities and stockholders equity of the firm on a particular date? *

A) Statement of stockholders equity.

B) Statement of cash flows.

C) Earnings statement.

D) Balance sheet.

2. Which of the following best describes a Form 10-K document: *

A) The information in this document is mandated by the SEC.

B) This content of this document is presented in the same order for all filing companies.

C) This is an annual report required by SEC.

D) All of the above.

3. What is a qualified report? *

A) A report stating that the auditors are not qualified to report on a firm.

B) A report that states the financial statements are in violation of GAAP.

C) A report that states that departures from GAAP exist in the firms financial statements.

D) A report that states the financial statements are presented fairly, in all material respects, and are in conformity with GAAP.

4. Notes to the Financial Statements must include: *

A) Ending inventory account

B) The date of the Balance sheet

C) Summary of the firms accounting policies

D) Both (A) and (B)

5. Which of the following is an internal source of liquidity *

A) Borrowing.

B) Sales of stock.

C) Gifts and donations.

D) Sales of products or services.

6. Which of the following accounts could be categorized as either a current or noncurrent liability depending on date the debt is due? *

A) Notes payable and deferred taxes.

B) Accounts payable and current portion of long-term debt.

C) Deferred taxes and mortgages due in 30 years.

D) Long-term warranties and accounts payable.

7. Which of the following cause(s) a change in the retained earnings account balance? *

A) Prior profits

B) Payment of dividends

C) All of the above

D) None of the above

8. How is Property, Plant & Equipment reported on the balance sheet? *

A) At the net value of P, P & E

B) At the total amount of P, P & E less depreciation.

C) At the total amount of P, P & E plus depreciation.

D) Both (A) and (B).

9. All the statements below represent the Common-Size Balance Sheet except: *

A) Is a part of proxy statement.

B) Allows for making industry comparisons.

C) Useful for evaluating trends within a firm.

D) Expresses each item on the balance sheet as a percentage of total assets.

10. Which items would be classified as shareholder's equity? *

A) Accounts payable, unearned revenue, pension liabilities.

B) Mortgages, convertible debentures, bonds payable.

C) Common stock, retained earnings, preferred stock.

D) Deferred taxes, accrued expenses, treasury stock.