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Quiz 1


1. All of the following are
liabilities, except __________.

a) Prepaid expenses
b) Provisions
c) Current liabilities
d) Long term liabilities

2. The Balance Sheet provides information
about all of the following, except __________.

a) Liabilities
b) Revenues
c) Assets
d) Shareholders equity

3. The Income Statement provides information
about all of the following, except __________.

a) Net Income before and after taxes

b) Gains and Losses
c) Cash Inflows and Outflows
d) Revenues and Expenses

4. The Income Statement summarizes
information about __________.

a) Revenues and Cash Inflows

b) Cash Inflows and Cash Outflows
c) Expenses and Cash Outflows
d) Revenues and Expenses

5. Common Stock is __________.

a)Excess cash received during share issuance

b)Nominal (par) value of the shares
c) Current market value of the shares
d)Profits accumulated over the years and not
yet distributed to shareholders

6. All of the following are reported under
Shareholders Equity, except __________.

a) Common Stock
b) Retained Earnings
c) Investment in stocks of another company
d) Additional Paid-In Capital

7. What is the fundamental accounting

a) Assets + Liabilities = Shareholders Equity

b) Assets = Liabilities - Shareholders Equity
c) Assets + Shareholders Equity = Liabilities
d) Assets = Liabilities + Shareholders Equity

8. Which of the following is not one of the three
important features of the Assets?

a) Probable economic benefit

b) Expire or depreciate through time
c) Controlled by a firm
d) Sufficient reliability to estimate those benefits

9. Creditors use accounting information primarily
to __________.

a) Negotiate compensation contracts

b) Understand if the firm is sound enough to cover
its warranties
c) Understand liquidity, risk, and profitability of
the firm
d) Predict a firms dividends

10. If a companys balance sheet shows Total
Assets worth Rs.5,000,000 and Total
Shareholders Equity worth Rs.3,000,000, how
much is Total Liabilities worth?

a) Rs.(2,000,000)
b) Rs.6,000,000
c) Rs.8,000,000
d) Rs.2,000,000