SECTION A MULTIPLE CHOICE QUESTIONS 1. What is the objective of financial reporting? a. Provide information that is useful to management for managing a business b. Provide information that clearly portrays nonfinancial transactions C. Provide information about the reporting entity that is useful to present and potential equity investors. lenders, and other creditors d. Provide information that excludes claims to the resources 2. When income statement reports sales of $10 million and yet actual sales were only $3 million, what qualitative characteristic of accounting information is violated? a. Neutrality b. Consistency c. Confirmatory value d. Faithful representation 3. Which of the following is ethical concern of accountants? conservative accounting b. industry practice earnings manipulation d. stock market volatility a conservative c. 4. According to U.S. GAAP revenue recognition standard, revenue should be recognized when........... Cash is received b. The performance obligation is fulfilled C. Production is completed Shares are issued