1. The users toward which financial statements are directed (a) Are very sophisticated and experienced in using financial (b) (c) (d) information. Are CPAs. Have degrees in accounting and/or finance. Havea reasonable understanding ofbusiness and economic activities. 2. The conceptual framework of accounting should have many positive effects as new accounting standards are developed. Which of the following is not one of those effects? (a) Financial statements among companies and industries should be more (b) Management should have greater latitude in choosing among (c) Standard setting should be more consistent with an overall statement (d) Accountants should be better able to assess the validity of different consistent and comparable. accounting alternatives. of the objectives and concepts of financial reporting. accounting alternatives for similar and dissimilar transactions and events. 3. A primary objective of financial reporting is to assist: Investors in predicting prospective cash flows. Investors in analyzing the economy. Suppliers in determining an appropriate discount to offer a particular company Banks to determine an appropriate interest rate for their commercial loans. (a) (b) (c) (d)