UpWork (oDesk) & Elance Financial Reporting Test Question & Answers

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UpWork (oDesk) & Elance Financial Reporting Test Question & Answers are really very important to pass UpWork & Elance test. You will get top score at this skill test exam. If you found any problem or wrong answer please inform me via contact or comments. We will try to solve it in short. This test is extremely valuable to acquire knowledge of  Financial Reporting. Lets Start test.


Ques : Which of the following does Financing Activities not include?
Ans  : Payments to vendors

Ques : Which of the following errors/s can a trial balance be used to detect?
Ans  :  An entry where both sides of the transaction are entered as a debit

Ques : Which of the following errors/s can a trial balance be used to detect?
Ans  :  A transposition error when entering the credit side of an entry

Ques : Which of the following are the 3 main sections of Statement of Cash Flows?
Ans  : Operating, Investing, Financing

Ques : Which of the following does the cash flow cycle measure?
Ans  : The time between purchase of raw materials and collection of cash

Ques : Which of the following is not a fundamental of accounting?
Ans  : Magnitude

Ques : Which of the following is a difference between a public company and a private one?
Ans  :  Public companies must have audited financial statements and prepared SEC reports

Ques : What does the indirect method of preparing the cash flow statement effectively accomplish?
Ans  : It takes the accrual basis of accounting and converts it to cash basis

Ques : Which cash collection technique is the most cost-effective for companies with many locations?
Ans  : Self-addressed stamped envelopes

Ques :  How does Treasury Stock differ from Trading Stock?
Ans  : Treasury stock has no voting or dividend rights

Ques : How often do companies typically generate standard financial reports?
Ans  : Monthly

Ques : What is one procedure a Company Manager would take to make the information on financial reports more useful for examination?
Ans  : Use the information on the financial reports to do a financial analysis, creating comparable ratios

Ques : How does the income statement of a charity differ from that of a public company?
Ans  : Charities produce a similar report which shows funding sources, and program expenses and other commitments

Ques : In what general way do investors use the information in the financial statements?
Ans  : To determine if a company is worth investing in

Ques : In what general way do investors use the information in the financial statements?
Ans  : To determine if a company is worth investing in

Ques :  To determine if a company is worth investing in
Ans  : Capital

Ques : A company declares a dividend. What is its effect on the cash?
Ans  :  It decreases Cash

Ques : How are the Cash Flow Statement and Balance Sheet related?
Ans  : Changes in Accounts Receivable and Accounts Payable are reflected on the Cash Flow Statement

Ques : Which is/are the primary financial statements used to measure liquidity?
Ans  : Cash Flow Statement and Balance Sheet

Ques : What is the primary reason a government entity would want to look at a company's financial statements?
Ans  : To determine tax liability

Ques : A company pays out a previous declared common stock dividend. What is its effect on the cash?
Ans  : It will decrease

Ques : What is the purpose of a trial balance?
Ans  : To act as a worksheet, making sure all debits equal all credits, as well as aid in the discovery of issues

Ques : The best financial report to see a company's cash balance is ______.
Ans  : Balance Sheet

Ques : What purpose would a company's financial statements have for the lending institutions?
Ans  : To determine if the company is meeting current covenants in their existing debt agreement

Ques : Financial managers use the _____________ to plan for monthly financing needs.
Ans  : cash budget

Ques : What is another name for the Balance Sheet?
Ans  : Statement of Financial Position

Ques : How are the Cash Flow Statement and Balance Sheet related?
Ans  : Ending cash balance from the Cash Flow Statement is transferred to the Balance Sheet

Ques : What are the four traits of a useful financial statement?
Ans  : Understandable, Relevant, Reliable, Comparable

Ques : What is the purpose of an income statement?
Ans  : To show the reader how the company made and spent money in the period presented

Ques : What is Treasury Stock?
Ans  : Stock repurchased by the issuing company, reducing the amount of stock outstanding in the open market

Ques : How do investors turn the information on the financial statements into more useful data which is comparable to other companies?
Ans  : Perform financial analysis

Ques : What is another name for the Income Statement?
Ans  : Profit & Loss Statement

Ques : Which is/are the primary financial statements used to measure solvency?
Ans  : Balance Sheet and Income Statement

Ques : The formula to calculate Ending Retained Earnings is ______.
Ans  : Ending Retained Earnings = Beginning RE - Investments - Dividends Paid + Net Income

Ques : The three sections of a Statement of Cash Flows are _____.
Ans  : Operating, investing, financing

Ques :  What does GAAP stand for?
Ans  : Generally Accepted Accounting Principles

Ques : Which financial statement best allows a firm to assess its ability to pay dividends?
Ans  : Statement of Cash Flows

Ques : What is one possible use employees would have of the company financial statements?
Ans  : It helps the employees to demonstrate their own personal contribution to the company

Ques : Which of the following transactions would have no impact on the stockholder's equity?
Ans  :  Purchase of land from the proceeds of a bank loan

Ques : Which of the following transactions is a non cash event but would be disclosed in the notes of the Statement of Cash Flows?
Ans  : Exchange of shares for an asset

Ques : What does the Balance Sheet reflect?
Ans  : Net changes over a period of time

Ques : How does Gross Income differ from Net Income?
Ans  : Gross Income measures profitability before operating expenses, whereas Net Income is calculated after all operating expenses

Ques : What is historical value?
Ans  : The original cost or price paid for an asset

Ques : When a company files a statement of their financial plans for the next two years with the SEC,  it is called a ______.
Ans  : Prospectus

Ques : What does Treasury Stock appear on the balance sheet as?
Ans  : As a reduction of opening Retained Earnings

Ques : What are the main categories of a balance sheet?
Ans  :  Assets, Liabilities, Equity

Ques : What way is government accounting different from public company accounting?
Ans  : The chart of accounts and financial statements are classified and organized differently

Ques : What is the one problem while comparing financial statements with companies based in different countries?
Ans  : Countries use different accounting standards, comparisons can only be made directly with countries using GAAP

Ques : Which is the primary financial statement used to measure profitability?
Ans  : Income Statement

Ques : How are the income statement and balance sheet linked?
Ans  :  Net income from the income statement transfers to the balance sheet equity section

Ques : Which method of preparing the statement of cash flows begins with Net Income?
Ans  : Indirect

Ques : By doing/issuing which of the following could a company raise short-term funds by selling receivables and inventory?
Ans  : By line of credit

Ques : How would the financial statements be useful for a Company Manager?
Ans  : To make operational decisions based on comparing past and current results

Ques : What is one possible use employees would have for the company financial statements?
Ans  : Employees have a vested interest in the company for job security and any equity incentive they have

Ques : What is the purpose of the statement of cash flows?
Ans  : To demonstrate how the company used their cash in the period reported

Ques : Pro forma statements are _______ statements.
Ans  : next years'

Ques : Retained earnings will change over time because of several factors. Which of the following factors would lead to an increase in the Retained Earnings?
Ans  : Net income

Ques : Which is/are the primary financial statements used to measure stability?
Ans  :  Balance Sheet

Ques : What is the purpose of an audit?
Ans  : To verify that statements made by the company are true based on an independent party's evaluation

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