Exercise $1-15($Static$)$ Multiple choice; concept statements, basic assumptions, principles $[$LO$1-6,1-7,1-8,1-9]$

Determine the response that best completes the following statements or questions.

The primary objective of financial reporting is to provide information:

multiple choice $1$

about a firm's financing and investing activities.

about a firm's management team.

concerning the changes in financial position resulting from the income$-$producing efforts of the entity.

useful to capital providers.

Statements of Financial Accounting Concepts issued by the FASB:

multiple choice $2$

identify the conceptual framework within which accounting standards are developed.

have been superseded by SFASs.

are subject to approval of the SEC.

represent GAAP.

In general, revenue is recognized when:

multiple choice $3$

a good or service has been delivered to a customer.

a purchase order has been received.

the sales price has been collected.

a contract has been signed.

In depreciating the cost of an asset, accountants are most concerned with:

multiple choice $4$

recognizing revenue in the appropriate period.

recognizing expense in the appropriate period.

conservatism.

full disclosure.

The primary objective of expense recognition is to:

multiple choice $5$

provide full disclosure.

provide timely information to decision makers.

record expenses in the period that related revenues are recognized.

promote comparability between financial statements of different periods.

The economic entity assumption states that, in the absence of contrary evidence, all entities will survive indefinitely.

multiple choice $6$

False

True