FNC1 Objective Assessment
Based on Pre-Assessment 1. On which financial statement is the revenue account for the firm reported? A. Balance Sheet B. Statement of owner’s equity C. Income statement D. Statement of cash flows 2. The adjustments for the month caused the revenue account to increase by $3,000 and the salaries expense account to increase by $5,000. How will these entries cause the $4,000 net loss shown on the trial balance to be reported on the income statement? A. As a net loss of $2,000 B. As a net loss of $6,000 C. As a net loss of $7,000 D. As a net loss of $9,000 3. Depreciation expense was incorrectly calculated and reported on the income statement at $5,000 for the period. The correct amount was $7,000. How will the change on the income statement impact the Statement of Cash flows? A. Operating activities on the revised Statement of Cash Flows will decrease by $7,000 B. Operating activities on the revised Statement of Cash Flows will decrease by $2,000 C. Operating activities on the revised Statement of Cash Flows will increase by $2,000 D. Operating activities on the revised Statement of Cash Flows will increase by $7,000 4. For two years a company has shown common size comparisons on its balance sheets. Cash has increased by 1%, income has decreased by 9%, current debt has increased by 12%, and retained earnings have decreased by a large amount. What does the data indicate about the company? A. It is a successful growth company B. It is failing to maintain its financial strength but the income statement appears strong C. It is a very successful company and should have few concerns about its financial strength D. It is failing to maintain its financial strength and should have serious concerns about its net income
