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ACC223 EXAM1

CH01-03 Unused Questions

CHAPTER 1

1. The financial statements most frequently provided include all of the following EXCEPT the

a. balance sheet.

b. income statement.

c. statement of cash flows.

d. comprehensive income statement.

2. An effective process of capital allocation is critical to a healthy economy, which

a. promotes productivity.

b. encourages innovation.

c. provides an efficient and liquid market for buying and selling securities.

d. all of the above.

3. What is the purpose of information presented in NOTES to the financial statements?

a. To provide disclosure required by generally accepted accounting principles (GAAP).

b. To correct improper presentation in the financial statements.

c. To provide recognition of amounts not included in the totals of the financial statements.

d. To present management’s responses to auditor comments.

4. All of the following are objectives of financial reporting EXCEPT to provide information

a. about enterprise resources, claims to those resources, and changes in them.

b. that is useful in investment and credit decisions.

c. about the management and major shareholders of an enterprise.

d. that is useful in assessing cash flow prospects.

5. The objectives of financial reporting include all of the following EXCEPT to provide information that

a. is useful to the Internal Revenue Service in allocating the tax burden to the business community.

b. is useful to those making investment and credit decisions.

c. is helpful in assessing future cash flows.

d. identifies the economic resources (assets), the claims to those resources (liabilities), and the changes in those resources and claims.

6. Which of the following organizations has at one time or another been responsible for setting U.S....