Accounting Questions – True & False

1. (True or False) Articulation of the financial statements mean that the balance sheet, income statement, and statement of stockholders equity must tie together and tell the same story.

2. (Circle one) Dividends paid by Corporation A usually (increases or decrease) the stockholder’s equity of Corporation A over time?

3. (True or False) The ending balance of stockholder equity usually found in the financing section of the statement of cash flows?

4. (True or False) Plant, property, and equipment usually carried at fair market value on the Income Statement?

5. (True or False) The amount spent on advertising to establish a competitive advantage such as a brand-name is usually accounted for on the face of the balance sheet as an asset?

6. (True or False) Is the cash used in investing activities on the statement of cash flows is usually the amount invested in plant, property and equipment (net of any proceeds from sales).

7. (Circle one) For a profitable mature company, is the cash flow from operations usually (positive or negative)?

8. A share repurchase would show up where in the statement of cash flows? (Operating, Financing, or Investing)

9. (True or False) A dirty surplus is something that reflects a change in an assets value but accountants (using GAAP) chose to book directly to the stockholders equity section of the balance sheet instead of the income statement?

10. (True or False) A stock is a balance in an account at a point in time and a flow is a change in the balances over time.

11. (True or False) Net income is one item that will appear on the income statement, the cash flow statement, and the statement of shareholders equity.