Posted: September 16th, 2017
Kaplan University AC 499 Quiz 9 (Graded)
Grade Details – All Questions
1. Question : A decrease in the profit margin of a company might mean that:
Student Answer: the company’s sales are decreasing.
the company’s costs are increasing.
the company’s net income is decreasing.
the company’s net income relative to sales is decreasing.
2. Question : Regulation S-X is issued by the ________.
Student Answer: APB
SEC
FASB
SFAS
3. Question : For financial information to be considered material, it must:
Student Answer: show value of more than $1 million.
make a difference to the judgment of the decision makers.
be at least 10% of the total value of the company.
affect the company’s net income.
4. Question : The accounting equation could be expressed as:
Student Answer: Liabilities + Stockholders’ Equity = Assets.
Assets – Stockholders’ Equity = Revenues.
Assets – Liabilities = Operating Income.
Assets + Liabilities = Stockholders’ Equity.
5. Question : Which of the following statements is false?
Student Answer: Financial statements are prepared by management.
External users have access to the detailed records of the company.
Internal users of financial information include management of the company.
A secondary objective of financial reporting includes determining prospective cash flows.
6. Question : Dividends are:
Student Answer: an expense on the income statement.
an account in stockholders’ equity.
added on the retained earnings statement.
a distribution of earnings to stockholders.
7. Question : The practice of using the least optimistic estimate when two estimates are possible is called:
Student Answer: relevance.
conservatism.
materiality.
reliability.
8. Question : You will find information about the revenues and expenses for a period of time in the:
Student Answer: balance sheet.
income statement.
statement of cash flows.
notes to the financial statements.
9. Question : The annual report on internal control systems which must be filed by many companies includes:
Student Answer: a statement that the auditors have issued an audit report on management’s assessment.
a reference to the auditor’s opinion on the company’s financial statements.
a management discussion and analysis of results.
a section on the disposition of the previous year’s internal control weaknesses.
10. Question : Verifiability is part of the primary decision-specific quality of ________.
Student Answer: relevance
timeliness
materiality
reliability
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