Avatto > CFA Level 1 > PRACTICE QUESTIONS > Financial Reporting And Analysis > Financial Reporting And Analysis Section 1

Financial Reporting And Analysis MCQ - Financial Reporting And Analysis Section 1

56 Which of the following is least likely a criterion for classification of a liability as current?

A
It is expected to be settled in the entity’s normal operating cycle.
B
It is expected to be settled in one year after the balance sheet date.
C
The entity has an unconditional right to defer settlement of the liability for at least one year after the balance sheet date.

The criterion for classifying a liability as current is that the entity does not have an unconditional right to defer settlement of the liability for at least one year after the balance sheet date.

57 The excess of current assets over current liabilities is called:

The excess of current assets over current liabilities is called working capital.

58 Which of the following is least likely classified as a current asset?

Trade payable is a current liability.

59 Which of the following is a contra asset account?

Allowance for doubtful accounts is a contra asset account because it is netted against the balance of trade receivables.

60 Which of the following is least likely a current liability?

Prepaid expense is a current asset and not a current liability.

Your Progress

0%

Start Practising!

You've answered 0 of 100 questions in this topic.

Practice Spotlight

Capitalizing vs. Expensing

Capitalizing a cost creates an asset and spreads expense across future periods. Expensing records the cost immediately, producing different effects on earnings, assets, profitability measures, and financial ratios.

Day 10 / 10

Global Spotlight

Build Your First Streak

Complete one short Financial Reporting And Analysis Section 1 session today, then return tomorrow. Consistency matters more than a long first session.

Day 2 / 10

Question Spotlight

Question:

Preferred shares are classified as:

A. equity only.
B. liability only.
C. equity or liability depending on the characteristics of the shares.

Correct answer: C

Explanation:

Preferred shares are classified as equity or financial liabilities depending on their characteristics. For example, perpetual preferred shares are classified as equity while preferred shares with mandatory redemption…

Click to view the complete question details

Day 8 / 10 Open this question

Community Insight

Based on 207 saved attempts

Most Attempted TopicFinancial Reporting And Analysis Section 1
Most Challenging TopicFinancial Reporting And Analysis Section 2
Average Accuracy97%

Featured Question

(Based on recent community answers)

Q. #227270% Incorrect

Which of the following is least likely to be filed with the Securities and Exchange…

Try This Question →

This Week's Challenge

Complete 20 questions. Community average: 5.8 this week.

0 / 20 Start Challenge →

Why Practice with Avatto?

High Quality MCQsExam-focused questions with accurate answers

Detailed ExplanationsStep-by-step explanations to enhance learning

Latest Exam PatternBased on updated syllabus and pattern

Performance AnalyticsTrack performance and improve weak areas

100% Free PracticePractice unlimited questions for free

Forgot your password?

I agree with the Terms.