UTA Entrance Accounting Exam 96 Questions with
Complete Solutions.
If net income after tax is $42,000, the tax rate is 30%, and total expenses not including
tax expense are $126,000, revenues must be: - ANS $186,000
Find what the net income was before taxes and add it to expenses to get the total
revenue.
The financial statement that reports what the company owns and what the company
owes is the - ANS balance sheet
The balance sheet shows assets, liabilities, and equity which show what is owned and
what is owed.
What is supposed to "balance" on the balance sheet? - ANS assets = liabilities +
owner's equity
The purpose of financial accounting is to provide - ANS financial information to external
users
The accounting equation is - ANS assets = liabilities + equity
Which financial statement provides information related to the financial performance of a
company during a specific period? - ANS income statement
The income statement reports earning for a company during a specific time period.
A company reports net income when - ANS services provided are greater than the cost
to provide the services
Which of the following is considered and expense?
Prepaid expense
Cost of goods sold
Sales
Building - ANS cost of goods sold
The government agency with legal authority over financial reporting of U.S. public
companies is called - ANS securities exchange commission (SEC)
FASB has no legal authority
Which financial statement reports dividends paid to shareholders? - ANS statement of
owners’ equity
, Dividends are not reported on the income statement, it is not an expense. They are
netted into retained earnings on the balance sheet.
Assets typically include - ANS accounts receivable and equipment
What financial document is for the specific purpose of reporting cash flows? - ANS cash
flow statement
Which statement provides information on goods and services provided to customers? -
ANS income statement
Providing goods and services to customers is revenues which is only on the income
statement.
Liabilities are - ANS obligations resulting from past transactions
Prepaid expenses is an asset because - ANS the company owns it
The company has paid ahead and therefore has future benefit
A past transaction has occurred
Economic resources is the technical term for - ANS assets
An examination of accounting records to determine if the records and reports are in
accordance with generally accepted accounting standards is called - ANS an audit
What increases retained earnings? - ANS revenues
Retained earnings is increased by net income.
Which financial statement reports what the company owes suppliers? - ANS balance
sheet
Which of the following is not a liability?
Unearned revenues
Accounts payable
Taxes payable
Sales - ANS sales
The purpose of Financial Accounting is to: (3) - ANS record, summarize, and report
transactions of the company
4 primary financial statements - ANS balance sheet, income statement, statement of
stockholder's equity, and statement of cash flows
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