Quiz 2

1. In Unit 2, we learned a method that records each cash transaction twice in accounting records: once to show the change in cash and another to show the reason for that change. Which of the following concepts best describes this practice?

=> Double-entry bookkeeping

 

2. Under the cash-basis double-entry bookkeeping we learned in Unit 2, how should you record a cash-increasing transaction?

=> Left side of main (cash) statement & Right side of label substatement

 

3. Under the cash-basis double-entry bookkeeping we learned in Unit 2, how should you record a cash-decreasing transaction?

=> Right side of main (cash) statement & Left side of label substatement

 

4. Which of the following financial statements presents stock (rather than flow) variables?

=> Balance sheet

 

5. At a high level, what does the balance sheet present?

=> Financial position of the company at the end of the fiscal period

 

6. At a high level, what does the income statement present?

=> Operating performance of the company during the fiscal period

 

7. At a high level, what does the statement of shareholder equity present?

=> Change in the residual claim of the company's owners during the fiscal period

 

 

8. At a high level, what does the statement of cash flows present?

=> Change in the company's total cash holdings during the fiscal period

 

9. Suppose 'A < B' means all information in A is included in B. Under the cash-basis double-entry bookkeeping we learned in Unit 2, how does such a relationship hold among the financial statements?

=> Income statement < Statement of shareholder equity < Statement of cash flows