Reference no: EM132552389

Question 1: Which group does a business protect itself against by limiting information disclosure based on accounting standards?

a. Suppliers

b. Government

c. Politicians

d. Competitors

Question 2: What does net income represent?

a. Gross profit minus operating expenses over a period of time

b. All the combined revenues, gains, expenses, and losses over a period of time

c. A select group of revenues, gains, expenses, and losses over a period of time

d. Revenues less cost of goods sold over a period of time

Question 3: What two questions are answered by the use of the statement of cash flows? Choose 2.

a. Where did the sales come from?

b. Where did the costs come from?

c. Where the money go?

d. Where did the money come from?

e. Where did the costs go?

Question 4: What do pro-formula financial statements exclude?

a. Cash payment for interest expense

b. Cash receipts from interest revenue

c. Cash payments for repurchase of treasury stock

d. Cash receipts from sale of trading securities

Question 5: Which item is financing activity?

a. Cash payments for interest expense

b. Cash receipts from interest revenue

c. Cash payments for repurchase of treasury stock

d. Cash receipts from sale of trading securities

Question 6: Which activity should be done first when preparing a direct method statement of cash flows?

a. Compute cash flows from operating activities

b. Compute cash flows from financing activities

c. Subtract the ending cash balance

d. Subtract the beginning cash balance