UTA Entrance Accounting Exam Intro to FInancial Statements Latest Update 2025-2026 100 Questions and 100% Verified Correct Answers Guaranteed A+
3 types of footnotes - CORRECT ANSWER: provides a description of the accounting
rules followed provides more details for the items listed on the financial statements provides information on things not listed on the financial statements
4 primary financial statements - CORRECT ANSWER: balance sheet, income
statement, statement of stockholder's equity, and statement of cash flows
A balance sheet reports cash of $3,000, accrued expenses of $1,300, equipment of
$10,000 and common stock of $2,500. Retained earnings must be: - CORRECT
ANSWER: $9,200
A business records revenues when - CORRECT ANSWER: it provides goods and
services to customers
A company earned $5,000 in revenues, collected $7,500 from customers and paid $3,000 for expenses incurred this period. What will be reported on the financial
statements for this period? - CORRECT ANSWER: Equity and assets are increased
A company had assets of $230,000 and liabilities of $145,000 at the beginning of the year. During the year the company earned $45,000 and reduced what it owed by $22,000. What is total assets at the end of the year? - CORRECT ANSWER: $253,000
A company provided services and will be paid next period. The transaction results in - CORRECT ANSWER: total assets and revenue (equity) increases 1 / 3
A company reports $200,000 total assets, $60,000 total equity and $180,000 total
revenues. What are total liabilities? - CORRECT ANSWER: $140,000
A company reports net income when - CORRECT ANSWER: services provided are
greater than the cost to provide the services
A company spent cash to purchase equipment. This transaction results in - CORRECT ANSWER: trading one asset for another, so all stays the same, the accounts of the asset just change
Accrued Expenses - CORRECT ANSWER: is an account representing all unpaid
financial obligations incurred by the organization, liability
An accounting system is used to provide information for who? (3) - CORRECT
ANSWER: internal management, external shareholders, government regulators
An audit report is issued by - CORRECT ANSWER: a certified public accountant
An examination of accounting records to determine if the records and reports are in accordance with generally accepted accounting standards is called - CORRECT
ANSWER: an audit
An expense is - CORRECT ANSWER: cost of providing goods and services
An investor looking to determine the financial strength of a company as of a certain date
would use which financial statement? - CORRECT ANSWER: balance sheet
Asset - CORRECT ANSWER: The company's economic resources to operate business.
probable future economic benefit 2 / 3
owned or controlled by the company resulting from a past transaction, something that has already occurred
assets typically include - CORRECT ANSWER: accounts receivable and equipment
Auditor's Report - CORRECT ANSWER: A professional accountant examines the
company's financial statements and gives a report that determines if the statements are fairly stated in accordance with GAAP.
Balance Sheet - CORRECT ANSWER: States what your business owns (assets) and
owes (liabilities) on a specific date. Assets minus liabilities is the amount owed.
Cash Flow Statement - CORRECT ANSWER: Shows the source of cash and what the
cash was used for during a period of time (cash and income are not the same)
Cash flow statement sections - CORRECT ANSWER: operating activities, investing
activities, financing activities.
Cash transactions related to common stock are reported in which section of the cash
flow statement? - CORRECT ANSWER: financing
common stock is an owner's equity account. Transactions related to owners are reported in the financing section of the cash flow statement.
Collect dividends from investments (O, I, or F) - CORRECT ANSWER: Operating
Determine expenses for the period given the company had the following:
Retained earnings, beginning = $2,000
- / 3