1. Users of financial reports include all of the following except

a. creditors.

b. government agencies.

c. workers.

d. All of these are users.

2. Accrual accounting means

a. sales revenues are recorded at the time cash is received.

b. business expenses are recorded when only cash is paid.

c. sales are recorded when the transactions are made but expenses are recorded when cash is paid.

d. none of the above.

3. Members of the Financial Accounting Standards Board are

a. employed by the American Institute of Certified Public Accountants (AICPA).

b. part-time employees.

c. required to hold a CPA certificate.

d. independent of any other organization.

4. The following are part of the "due process" system used by the FASB in the creation of a typical FASB Statement of Financial Accounting Standards:

1. Exposure Draft

2. Statement of Financial Accounting Standards

3. Public Discussion

The chronological order in which these items are released is as follows:

A 1,2,3

B 1,3,2

C 2,3,1

D 3,1,2

5. The purpose of the International Accounting Standards Board is to

a. issue enforceable standards which regulate the financial accounting and reporting of multinational corporations.

b. develop a uniform currency in which the financial transactions of companies through- out the world would be measured.

c. promote uniform accounting standards among countries of the world.

d. arbitrate accounting disputes between auditors and international companies.

6. Which of the following is not a purpose of financial reporting?

a. To provide information about economic resources, the claims to those resources, and the changes in them.

b. To provide information that is helpful to investors and creditors and other users in assessing the amounts, timing, and uncertainty of future cash flows.

c. To provide information that is useful to those making investment and credit decisions.

d. All of these are objectives of financial reporting.

7. Going concern assumption means:

a. It is not possible for a company to stop operating

b. Companies are expected to operate for 100 years

c. Accountants believe businesses are created to continue to operate without stop

d. Accountants expect that businesses can stop operating anytime

8. Which of the following is true?

a. The balance sheet contains assets and expenses

b. The income statement contains income and liability

c. The statement of financial position contains equity and net profit

d. None of these is true

9. Accountants assume that users of financial statements have no knowledge of business and financial accounting subject? Is this true? What are accountants doing to solve this problem?

10. One of the qualities of an accounting report is free from error. In real life, is it possible for an accounting report to be free from error? How is the accounting profession trying to ensure error-free reporting?

Answer rating: 100% (QA)

The detailed answer for the above question is provided below 1 1 Users of financial reports include all of the following except Answer Workers Explanation Users of financial statements are management ... View the full answer