Which of the following financial statements provides information about a company’s financial position at a specific point in time?
a) Income statement
b) Balance sheet
c) Statement of cash flows
d) Statement of retained earnings
Answer: b) Balance sheet
Which financial statement shows the revenues, expenses, and net income or loss of a company over a specific period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: b) Income statement
Which of the following items is typically found on a balance sheet?
a) Net income
b) Cost of goods sold
c) Accounts receivable
d) Operating expenses
Answer: c) Accounts receivable
Which financial statement shows the changes in a company’s retained earnings over a specific period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: d) Statement of retained earnings
Which of the following is an example of a current liability?
a) Long-term debt
b) Accounts payable
c) Land
d) Retained earnings
Answer: b) Accounts payable
Financial Statements Preparation MCQs
Which financial statement provides information about a company’s cash inflows and outflows during a specific period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: c) Statement of cash flows
Which of the following is considered an operating activity in the statement of cash flows?
a) Issuing long-term debt
b) Purchasing equipment
c) Selling merchandise to customers
d) Paying dividends to shareholders
Answer: c) Selling merchandise to customers
Which financial statement would you find the ending cash balance?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: c) Statement of cash flows
Which financial statement would you find the cost of goods sold (COGS)?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: b) Income statement
Which financial statement reports the changes in equity from the beginning to the end of a specific period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: d) Statement of retained earnings
Financial Statements Preparation MCQs
Which of the following financial statements reports the amounts of cash collected and cash paid for various activities such as operating, investing, and financing?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: c) Statement of cash flows
Which financial statement provides information about the changes in a company’s assets, liabilities, and equity during a specific period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: a) Balance sheet
Which of the following items would be classified as a long-term asset on a balance sheet?
a) Accounts receivable
b) Inventory
c) Prepaid expenses
d) Land and buildings
Answer: d) Land and buildings
Which financial statement shows the details of a company’s revenues, expenses, and net income or loss for each product or service it offers?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Segmental statement
Answer: d) Segmental statement
Which of the following is an example of a non-current liability?
a) Accounts payable
b) Salaries payable
c) Short-term loans
d) Long-term debt
Answer: d) Long-term debt
Financial Statements Preparation MCQs
Which financial statement would you find the total equity of a company?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: a) Balance sheet
Which of the following items would be classified as an operating expense on an income statement?
a) Interest income
b) Sales revenue
c) Cost of goods sold
d) Gain on the sale of assets
Answer: c) Cost of goods sold
Which financial statement shows the accumulated profits or losses of a company since its inception?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: d) Statement of retained earnings
Which of the following is considered an investing activity in the statement of cash flows?
a) Paying salaries to employees
b) Borrowing funds from a bank
c) Purchasing equipment
d) Issuing new shares of stock
Answer: c) Purchasing equipment
Which financial statement would you find the net income or net loss of a company?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: b) Income statement
Financial Statements Preparation MCQs
Which financial statement provides a snapshot of a company’s financial performance over a specific period by showing the revenue, expenses, and resulting net income or loss?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: b) Income statement
Which of the following items would be classified as an intangible asset on a balance sheet?
a) Buildings
b) Inventory
c) Accounts receivable
d) Patents
Answer: d) Patents
Which financial statement reports the changes in a company’s equity from the beginning to the end of a specific period, including items such as capital contributions and dividends?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: d) Statement of changes in equity
Which of the following is considered a financing activity in the statement of cash flows?
a) Purchasing inventory
b) Paying dividends to shareholders
c) Selling products or services
d) Investing in new equipment
Answer: b) Paying dividends to shareholders
Which financial statement provides an overview of a company’s financial position, including its assets, liabilities, and equity, at a specific point in time?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: a) Balance sheet
Financial Statements Preparation MCQs
Which of the following items would be classified as a current asset on a balance sheet?
a) Land
b) Prepaid expenses
c) Long-term debt
d) Goodwill
Answer: b) Prepaid expenses
Which financial statement shows the details of a company’s cash inflows and outflows, categorized into operating, investing, and financing activities?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: c) Statement of cash flows
Which of the following is considered a non-operating expense on an income statement?
a) Cost of goods sold
b) Advertising expenses
c) Interest income
d) Rent expense
Answer: c) Interest income
Which financial statement would you find the accumulated depreciation of a company’s assets?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: a) Balance sheet
Which of the following is an example of an external user of financial statements?
a) Company employees
b) Shareholders
c) Management team
d) Board of Directors
Answer: b) Shareholders
Financial Statements Preparation MCQs
Which financial statement provides information about a company’s revenue, expenses, and resulting profit or loss for a specific period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: b) Income statement
Which of the following items would be classified as a current liability on a balance sheet?
a) Long-term debt
b) Prepaid expenses
c) Accounts payable
d) Buildings
Answer: c) Accounts payable
Which financial statement shows the sources and uses of a company’s cash, including cash flows from operating, investing, and financing activities?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: c) Statement of cash flows
Which of the following is considered an investing activity in the statement of cash flows?
a) Issuing new shares of stock
b) Paying salaries to employees
c) Borrowing funds from a bank
d) Purchasing long-term investments
Answer: d) Purchasing long-term investments
Which financial statement reports the changes in a company’s retained earnings over a specific period, including net income, dividends, and prior period adjustments?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of retained earnings
Answer: d) Statement of retained earnings
Financial Statements Preparation MCQs
Which of the following items would be classified as a non-current liability on a balance sheet?
a) Salaries payable
b) Accounts receivable
c) Short-term loans
d) Bonds payable
Answer: d) Bonds payable
Which financial statement provides a summary of a company’s assets, liabilities, and equity at a specific point in time?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: a) Balance sheet
Which of the following is considered a non-operating income on an income statement?
a) Sales revenue
b) Interest income
c) Cost of goods sold
d) Rent expense
Answer: b) Interest income
Which financial statement would you find the total comprehensive income of a company?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: b) Income statement
Which of the following is an example of an internal user of financial statements?
a) Shareholders
b) Creditors
c) Tax authorities
d) Management team
Answer: d) Management team
Financial Statements Preparation MCQs
Which financial statement provides information about the changes in a company’s equity from the beginning to the end of a specific period?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: d) Statement of changes in equity
Which of the following items would be classified as a current asset on a balance sheet?
a) Buildings
b) Accounts payable
c) Inventory
d) Long-term debt
Answer: c) Inventory
Which financial statement shows the details of a company’s cash inflows and outflows from its operating activities?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: c) Statement of cash flows
Which of the following is considered a financing activity in the statement of cash flows?
a) Investing in new equipment
b) Borrowing funds from a bank
c) Paying salaries to employees
d) Selling products or services
Answer: b) Borrowing funds from a bank
Which financial statement provides information about a company’s assets, liabilities, and equity at a specific point in time?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: a) Balance sheet
Financial Statements Preparation MCQs
Which of the following items would be classified as a non-current asset on a balance sheet?
a) Accounts receivable
b) Prepaid expenses
c) Short-term investments
d) Plant and equipment
Answer: d) Plant and equipment
Which financial statement shows the details of a company’s revenue, expenses, and resulting profit or loss for a specific period, segmented by geographical regions?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Segmental income statement
Answer: d) Segmental income statement
Which of the following is considered an operating activity in the statement of cash flows?
a) Repurchasing company shares
b) Purchasing long-term investments
c) Selling products or services
d) Paying interest on loans
Answer: c) Selling products or services
Which financial statement would you find the accumulated depreciation of a company’s assets?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Statement of changes in equity
Answer: a) Balance sheet
Which of the following is an example of an external user of financial statements?
a) Internal auditors
b) Suppliers
c) Board of Directors
d) Management team
Answer: b) Suppliers