FNU Principles of Accounting I-DL-A Midterm Exam 2021

Question 1 

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)

prior period statement

statement of owner's equity

income statement

balance sheet

Question 2 

The Sarbanes-Oxley Act of 2002 prohibits employment of auditors by their clients for what period after their last audit of the client?

Indefinitely

One year

Two years

There is no such prohibition.

Question 3 

Revenues are reported when

a contract is signed

cash is received from the customer

work is begun on the job

work is completed on the job

Question 4 

A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing

the Income Statement.

the Balance Sheet.

the Statement of Cash Flows.

cannot be determined.

Question 5 

Earning revenue

increases assets, increases owner’s equity.

increases assets, decreases owner's equity

increases one asset, decreases another asset

decreases assets, increases liabilities