Fap Chapter 01

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Your Results: | The correct answer for each question is indicated by a . | ------------------------------------------------- Top of Form | 1 INCORRECT | | Which one of the following users of accounting information is considered to be an external user of accounting information rather than an internal user of accounting information? | | | A) | Internal auditors. | | | B) | Company managers. | | | C) | Company customers. | | | D) | Officers and directors. | | | E) | Budget officers. | | | | | | Feedback: Internal auditors are considered to be internal users. C2 | | 2 INCORRECT | | A CPA owns a large home and she has divided the second floor into two separate units: one used as her personal…show more content…
| | | D) | Balance sheet. | | | E) | Answers A, B & C are all correct. | | | | | | Feedback: The income statement is a dynamic statement showing changes or accumulated totals oveover a period of time, such as one month, one quarter, or one year. P2 | | 11 INCORRECT | | Total assets and total liabilities of a company are reported on which of the following? | | | A) | Income statement. | | | B) | Balance sheet. | | | C) | Statement of cash flows. | | | D) | Statement of owner's equity. | | | E) | None of the above. | | | | | | Feedback: The income statement reports the revenues, expenses, and net income (or net loss) of the company. P2 | | 12 INCORRECT | | A statement of cash flows will report cash flows from which of the following activities? | | | A) | Operating activities. | | | B) | Investing activities. | | | C) | Financing activities. | | | D) | All of the above. | | | E) | Only A and C are correct. | | | | | | Feedback: Operating activities are not the only activities reported on the statement of cash flows. P2 | | 13 INCORRECT | | When cash is received from a customer in payment of an account receivable, how are the elements of the accounting equation affected? | | | A) | Decrease assets (cash) and increase assets (accounts receivable). | | | B) | Increase assets (cash) and decrease assets (accounts receivable). | | | C) | Increase assets and

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