1. Under IFRS, equity does not include

a	long-term leases.

b	accumulated other comprehensive income.

c	retained earnings.

d	common and/or preferred shares.

2. The common characteristic of both assets and liabilities is that they both

a	represent contractual or other rights.

b	provide an economic resource.

c	result from a past transaction or event.

d	represent a present responsibility.

3. The strict cash basis of accounting

a	records expenses when incurred.

b	none of the above

c	does not conform with GAAP.

d	records revenue when earned.

4. The modified cash basis

a	capitalizes and depreciates property, plant, and equipment.

b	does not usually record inventory.

c	is derived from the accrual basis of accounting.

d	is frequently used by manufacturing firms.

5. Segregating a companys recurring operating income from nonrecurring income sources is useful because

a	recurring income is constantly changing.

b	nonrecurring income is irrelevant to stakeholders.

c	nonrecurring income is subject to greater management bias and uncertainty.

d	results from continuing operations have greater significance for predicting future performance.