Chapter Twelve: Corporations & Their Financial Statements

Approved & Edited by ProProfs Editorial Team

The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.

Learn about Our Editorial Process

| By Smzachary

Smzachary

Community Contributor

Quizzes Created: 2 | Total Attempts: 186

Questions: 56 | Attempts: 116 | Updated: Mar 22, 2023

Questions

Settings

Feedback

During the Quiz End of Quiz

Play as

Quiz Flashcard

Create your own Quiz

Chapter Twelve: Corporations & Their Financial Statements - Quiz

Questions and Answers

1.

LOS Question:Describe the structure of the earnings statement and explain the sources of net income(or net earnings).
2.

LOS Question:Describe the components of the cash flow statement and classify an accounting activity oritem as a cash flow from operating, financing or investing activities.
3.

LOS Question:Explain the importance of the notes to the financial statements and the auditor’s report.
4.

I’VE SEEN VARIOUS FORMS OF THE BASIC ACCOUNTING EQUATION. WHICHEQUATION IS CORRECT?
5.

HOW DOES A BALANCE SHEET BALANCE WHEN A COMPANY FIRST STARTSOUT?
6.

WHAT DOES “CONSOLIDATED” MEAN WHEN WE ARE TALKING ABOUTCONSOLIDATED FINANCIAL STATEMENTS?
7.

WHAT ARE THE JOURNAL ENTRIES FOR DIVIDENDS DECLARED AND FOR NEWBOND ISSUES?
8.

HOW DOES A COMPANY ESTABLISH THE VALUE OF GOODWILL?
9.

CAN YOU PLEASE GIVE ME AN EXAMPLE OF AN INTANGIBLE ASSET WITH AFINITE LIFE
10.

CAN A COMPANY WRITE OFF GOODWILL?
11.

WHAT IS THE NET ASSET VALUE OF A COMPANY? IS IT RELATED TO BOOKVALUE?
12.

HOW COME ISSUED SHARES ARE NOT MENTIONED ON THE BALANCE SHEET?
13.

CAN YOU PLEASE EXPLAIN THE DIFFERENCE BETWEEN FIFO AND LIFO WITHAN EXAMPLE?
14.

CAN YOU PLEASE EXPLAIN HOW CAPITALIZING A LEASE WORKS?
15.

WHAT IS THE PURPOSE OF CAPITALIZING ITEMS ON THE BALANCE SHEET?
16.

HOW IS THE DECISION REACHED TO CAPITALIZE AN ITEM ON THE BALANCESHEET?
17.

DOES ACCUMULATED APPRECIATION ON THE BALANCE SHEET MEAN THATTHE COMPANY HAS EXTRA CASH AVAILABLE?
18.

CAN YOU DISTINGUISH BETWEEN AMORTIZATION, DEPRECIATION ANDDEPLETION? THEY ALL SEEM TO BE THE SAME THING.
19.

WHAT IS A SINKING FUND?
20.

COULD YOU PLEASE EXPLAIN WHY ACCOUNTING PRINCIPLES WOULD DIFFERFROM GOVERNMENT TAXATION PRINCIPLES?
21.

CAN YOU EXPLAIN WHY FUTURE TAXES WOULD SOMETIMES BE RECORDEDAS AN ASSET AND SOMETIMES AS A LIABILITY?
22.

HOW COME THE TAXES A COMPANY HAS TO PAY TO THE GOVERNMENT MAYNOT BE THE SAME AS THEY SHOW ON THEIR FINANCIAL STATEMENTS?
23.

WHAT SHOULD I REMEMBER REGARDING PERMANENT AND TEMPORARYDIFFERENCES BETWEEN TAX PROVISIONS AND ACTUAL TAX PAYABLE?
24.

CAN YOU EXPLAIN WHAT HAPPENS ON THE FINANCIAL STATEMENTS WHEN ABOND IS SOLD AT A PRICE HIGHER THAN PAR?
25.

WHAT ARE THE COSTS ASSOCIATED WITH ISSUING A BOND?
26.

WHAT IS A FOREIGN CURRENCY TRANSLATION?
27.

WHAT IS AN IMPAIRMENT LOSS?
28.

WHAT DOES CASH SURRENDER VALUE REFER TO?
29.

HOW IS THE COST METHOD OF ACCOUNTING REFLECTED ON THE EARNINGSSTATEMENT?
30.

CAN YOU DESCRIBE THE DIFFERENCE BETWEEN A SUBSIDIARY AND ANAFFILIATED COMPANY?
31.

HOW IS BALANCE SHEET AFFECTED AFTER THE COMPANY DECLARESSTOCK DIVIDEND?
32.

CAN YOU EXPLAIN THE AMORTIZATION OF BOND PREMIUMS WHEN BONDSARE SOLD FOR HIGHER THAN PAR?
33.

HOW WOULD DEFERRED CHARGES CHANGE OVER TIME ON THE BALANCESHEET:?
34.

WHAT DOES “RECEIVERSHIP” REFER TO?
35.

HOW IS A GAIN OR LOSS ON THE EARNINGS STATEMENT RECORDED ON THEBALANCE SHEET?
36.

WHY WOULD DIVIDENDS NOT BE RECORDED ON THE EARNINGS STATEMENTTHAT WERE PAID FROM AN AFFILIATED COMPANY?
37.

CAN YOU EXPLAIN HOW ALL THE TAX ENTRIES OF THE VARIOUS TEXTBOOKSAMPLE FINANCIAL STATEMENTS ARE RELATED?
38.

HOW WOULD REVENUE, WHICH AFFECTS THE EARNINGS STATEMENT,ULTIMATELY BE RECORDED ON THE BALANCE SHEET?
39.

CAN YOU PLEASE EXPLAIN WHERE MINORITY INTEREST COMES FROM ONTHE EARNINGS STATEMENT?
40.

CAN YOU SUMMARIZE THE DIFFERENCES BETWEEN THE CONSOLIDATEDMETHOD, EQUITY METHOD AND COST METHOD OF ACCOUNTING?
41.

IF THE FINANCIAL STATEMENTS WERE CONSOLIDATED, WOULD WE STILLSEE ENTRIES FOR EQUITY AND COST METHODS OF ACCOUNTING ON THESAME STATEMENTS?
42.

WHERE ON THE SAMPLE FINANCIAL STATEMENTS CAN I SEE EXAMPLES OFTHE CONSOLIDATED, EQUITY INCOME AND COST METHODS OFACCOUNTING?
43.

WHAT IS THE DEFINITION OF A QUASI-LIABILITY?
44.

WHERE IN THE FINANCIAL STATEMENTS WOULD WE SEE THE EARNINGSFROM THE SUBSIDIARY COMPANY?
45.

WHY ISN’T A DIVIDEND PAID TO A COMPANY THAT CLAIMS EQUITY INCOMERECORDED ON THE EARNINGS STATEMENT?
46.

WHAT IMPACT DO NON-CASH ITEMS HAVE ON THE FINANCIAL STATEMENTTHAT DIFFER FROM THEIR IMPACT ON RATIO CALCULATIONS?
47.

WHAT IS THE DIFFERENCE BETWEEN MINORITY INTEREST ON THE BALANCESHEET VERSUS MINORITY INTEREST ON THE EARNINGS STATEMENT?
48.

WHY DO WE ADD BACK SOME NON-CASH ITEMS WHEN CALCULATINGRATIOS?
49.

CAN YOU PLEASE DESCRIBE THE DIFFERENCE BETWEEN THE DIRECT ANDINDIRECT CASH FLOW METHODS?
50.

CAN YOU PLEASE EXPLAIN ITEM 50 ON THE SAMPLE CASH FLOWSTATEMENT?

Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

Current Version
Mar 22, 2023

Quiz Edited by
ProProfs Editorial Team
Jan 22, 2009

Quiz Created by
Smzachary

Chapter Twelve: Corporations & Their Financial Statements

LOS Question:Describe the structure of the earnings statement and explain the sources of net income(or net earnings).

LOS Question:Describe the components of the cash flow statement and classify an accounting activity oritem as a cash flow from operating, financing or investing activities.

LOS Question:Explain the importance of the notes to the financial statements and the auditor’s report.

I’VE SEEN VARIOUS FORMS OF THE BASIC ACCOUNTING EQUATION. WHICHEQUATION IS CORRECT?

HOW DOES A BALANCE SHEET BALANCE WHEN A COMPANY FIRST STARTSOUT?

WHAT DOES “CONSOLIDATED” MEAN WHEN WE ARE TALKING ABOUTCONSOLIDATED FINANCIAL STATEMENTS?

WHAT ARE THE JOURNAL ENTRIES FOR DIVIDENDS DECLARED AND FOR NEWBOND ISSUES?

HOW DOES A COMPANY ESTABLISH THE VALUE OF GOODWILL?

CAN YOU PLEASE GIVE ME AN EXAMPLE OF AN INTANGIBLE ASSET WITH AFINITE LIFE

CAN A COMPANY WRITE OFF GOODWILL?

WHAT IS THE NET ASSET VALUE OF A COMPANY? IS IT RELATED TO BOOKVALUE?

HOW COME ISSUED SHARES ARE NOT MENTIONED ON THE BALANCE SHEET?

CAN YOU PLEASE EXPLAIN THE DIFFERENCE BETWEEN FIFO AND LIFO WITHAN EXAMPLE?

CAN YOU PLEASE EXPLAIN HOW CAPITALIZING A LEASE WORKS?

WHAT IS THE PURPOSE OF CAPITALIZING ITEMS ON THE BALANCE SHEET?

HOW IS THE DECISION REACHED TO CAPITALIZE AN ITEM ON THE BALANCESHEET?

DOES ACCUMULATED APPRECIATION ON THE BALANCE SHEET MEAN THATTHE COMPANY HAS EXTRA CASH AVAILABLE?

CAN YOU DISTINGUISH BETWEEN AMORTIZATION, DEPRECIATION ANDDEPLETION? THEY ALL SEEM TO BE THE SAME THING.

WHAT IS A SINKING FUND?

COULD YOU PLEASE EXPLAIN WHY ACCOUNTING PRINCIPLES WOULD DIFFERFROM GOVERNMENT TAXATION PRINCIPLES?

CAN YOU EXPLAIN WHY FUTURE TAXES WOULD SOMETIMES BE RECORDEDAS AN ASSET AND SOMETIMES AS A LIABILITY?

HOW COME THE TAXES A COMPANY HAS TO PAY TO THE GOVERNMENT MAYNOT BE THE SAME AS THEY SHOW ON THEIR FINANCIAL STATEMENTS?

WHAT SHOULD I REMEMBER REGARDING PERMANENT AND TEMPORARYDIFFERENCES BETWEEN TAX PROVISIONS AND ACTUAL TAX PAYABLE?

CAN YOU EXPLAIN WHAT HAPPENS ON THE FINANCIAL STATEMENTS WHEN ABOND IS SOLD AT A PRICE HIGHER THAN PAR?

WHAT ARE THE COSTS ASSOCIATED WITH ISSUING A BOND?

WHAT IS A FOREIGN CURRENCY TRANSLATION?

WHAT IS AN IMPAIRMENT LOSS?

WHAT DOES CASH SURRENDER VALUE REFER TO?

HOW IS THE COST METHOD OF ACCOUNTING REFLECTED ON THE EARNINGSSTATEMENT?

CAN YOU DESCRIBE THE DIFFERENCE BETWEEN A SUBSIDIARY AND ANAFFILIATED COMPANY?

HOW IS BALANCE SHEET AFFECTED AFTER THE COMPANY DECLARESSTOCK DIVIDEND?

CAN YOU EXPLAIN THE AMORTIZATION OF BOND PREMIUMS WHEN BONDSARE SOLD FOR HIGHER THAN PAR?

HOW WOULD DEFERRED CHARGES CHANGE OVER TIME ON THE BALANCESHEET:?

WHAT DOES “RECEIVERSHIP” REFER TO?

HOW IS A GAIN OR LOSS ON THE EARNINGS STATEMENT RECORDED ON THEBALANCE SHEET?

WHY WOULD DIVIDENDS NOT BE RECORDED ON THE EARNINGS STATEMENTTHAT WERE PAID FROM AN AFFILIATED COMPANY?

CAN YOU EXPLAIN HOW ALL THE TAX ENTRIES OF THE VARIOUS TEXTBOOKSAMPLE FINANCIAL STATEMENTS ARE RELATED?

HOW WOULD REVENUE, WHICH AFFECTS THE EARNINGS STATEMENT,ULTIMATELY BE RECORDED ON THE BALANCE SHEET?

CAN YOU PLEASE EXPLAIN WHERE MINORITY INTEREST COMES FROM ONTHE EARNINGS STATEMENT?

CAN YOU SUMMARIZE THE DIFFERENCES BETWEEN THE CONSOLIDATEDMETHOD, EQUITY METHOD AND COST METHOD OF ACCOUNTING?

IF THE FINANCIAL STATEMENTS WERE CONSOLIDATED, WOULD WE STILLSEE ENTRIES FOR EQUITY AND COST METHODS OF ACCOUNTING ON THESAME STATEMENTS?

WHERE ON THE SAMPLE FINANCIAL STATEMENTS CAN I SEE EXAMPLES OFTHE CONSOLIDATED, EQUITY INCOME AND COST METHODS OFACCOUNTING?

WHAT IS THE DEFINITION OF A QUASI-LIABILITY?

WHERE IN THE FINANCIAL STATEMENTS WOULD WE SEE THE EARNINGSFROM THE SUBSIDIARY COMPANY?

WHY ISN’T A DIVIDEND PAID TO A COMPANY THAT CLAIMS EQUITY INCOMERECORDED ON THE EARNINGS STATEMENT?

WHAT IMPACT DO NON-CASH ITEMS HAVE ON THE FINANCIAL STATEMENTTHAT DIFFER FROM THEIR IMPACT ON RATIO CALCULATIONS?

WHAT IS THE DIFFERENCE BETWEEN MINORITY INTEREST ON THE BALANCESHEET VERSUS MINORITY INTEREST ON THE EARNINGS STATEMENT?

WHY DO WE ADD BACK SOME NON-CASH ITEMS WHEN CALCULATINGRATIOS?

CAN YOU PLEASE DESCRIBE THE DIFFERENCE BETWEEN THE DIRECT ANDINDIRECT CASH FLOW METHODS?

CAN YOU PLEASE EXPLAIN ITEM 50 ON THE SAMPLE CASH FLOWSTATEMENT?