Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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The IASB specifies that “the elements
directly related to the measurement of financial position are
a. | assets, liabilities and
profit” | b. | expenses, revenues
and equity” | c. | expenses, revenues
and profit” | d. | assets,
liabilities and equity” |
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2.
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Which of the following is not a long-term
liability?
a. | Accounts payable (for payables due in more than one
year) | b. | Bank borrowings reimbursable in more than one
year | c. | Bank overdrafts | d. | Bonds |
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3.
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Where is the decreasing liquidity approach commonly
used?
a. | German-speaking countries | b. | North America | c. | European
countries | d. | None of the above
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4.
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Which of the following is not a current
asset?
a. | Accounts receivable | b. | Inventory of finished products | c. | Inventory of raw materials | d. | Land |
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5.
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Which of the following is a financial
asset?
a. | Inventories | b. | Equipment | c. | Loan to an
associate | d. | Accounts receivable
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6.
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Classification by nature is the method often used
in:
a. | North America | b. | Asia | c. | Continental and
East European countries | d. | All of the
above |
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7.
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The cash flow statement consists of the following
sections:
a. | Operating and non-operating | b. | Current and non-current | c. | Operating,
investing, and financing | d. | Trading and
financial |
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8.
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Which of the following statements is
true?
a. | The balance sheet, the income statement and the cash
flow statement are totally linked. | b. | There are links
only between the balance sheet and the cash flow statement. | c. | There is no link between the balance sheet, the income statement and the cash
flow statement. | d. | There are links
only between the income statement and the cash flow statement.
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9.
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The income statement impact on the cash flow
statement is through revenues and expenses collected or paid during the year.
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10.
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Continental European balance sheets reflect a
patrimonial approach and so list current assets at the top.
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