Practice Quiz

MTEL Business Practice Exam - Question List

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31.
At the end of a given financial period, an accountant purposely fails to record the appropriate deferral entries for expenses that were paid in advance. This will result in which of the following potentially fraudulent manipulations of the financial statements?
  1. The current period's liabilities will be overstated.
  2. The next period's earnings will be overstated.
  3. The current period's net profit will be overstated.
  4. The next period's cost of goods sold will be overstated.
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32.
Which of the following best describes the primary purpose of the balance sheet?
  1. Providing a list of a business's general ledger account balances at a given date.A. Providing a list of a business's general ledger account balances at a given date.
  2. Summarizing revenues, expenses, and net income or loss for a business over a given period.
  3. Providing a detailed account of a business's financial position at a given date.
  4. Summarizing the changes in equity due to investments and profit or loss for a given period.
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33.
Which of the following is categorized as investment activity on the Statement of Cash Flows for a business?
  1. Buying equipment.
  2. Issuing bonds payable.
  3. Selling treasury stock.
  4. Paying dividends.
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34.
Which of the following ratios is the most useful to a manager for evaluating whether the assets of a division are used efficiently?
  1. Return on investment.
  2. Inventory turnover.
  3. Return on equity.
  4. Accounts receivable turnover
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35.
During a given year of operation, a business issues $50,000 of common stock, pays dividends of $20,000, and pays back a bank loan of $10,000. What is the net cash provided by these activities for that year?
  1. $(10,000)
  2. $ 20,000
  3. $ 30,000
  4. $ 50,000
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