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- 1. Multiple Choice
How does accounting help the capital allocation process attract investment capital?
Provides timely, relevant information.
Encourages innovation.
Promotes productivity.
Increase good reputation
- 2. Multiple Choice
The major financial statements include all of the following except:
a. Statement of financial position.
Statement of changes in financial position.
a. Statement of comprehensive income.
a. Statement of stockholders’ equity.
- 3. Multiple Choice
General-purpose financial statements are the product of
financial accounting.
managerial accounting.
both financial and managerial accounting.
neither financial nor managerial accounting.
- 4. Multiple Choice
What is a major objective of financial reporting?
Provide information that is useful to management in making decisions.
Provide information that clearly portray nonfinancial transactions.
Provide information that is useful to assess the amounts, timing, and uncertainty of perspective cash receipts.
Provide information that excludes claims to the resources.
- 5. Multiple Choice
The underlying theme of the conceptual framework is
decision usefulness.
understandability.
reliability.
comparability.
- 6. Multiple Choice
Which of the following is a fundamental quality of useful accounting information?
Comparability.
Relevance.
Consistency.
Materiality.
- 7. Multiple Choice
Which of the following is an ingredient of relevance?
Completeness.
Representational faithfulness.
Neutrality.
Predictive value.
- 8. Multiple Choice
Which of the following is an ingredient of faithful representation?
Predictive value.
Timeliness.
Neutrality.
Feedback value.
- 9. Multiple Choice
The two fundamental qualities that make accounting information useful for decision making are
comparability and consistency.
materiality and timeliness.
relevance and faithful representation.
reliability and comparability.
- 10. Multiple Choice
Which of the following is not a basic element of financial statements?
Assets.
Statement of financial position.
Equity.
Income.
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