1. Primary users of accounting information are accountants.
a. True
b. False
2. Short term investment would be categorised as assets and would appear on income statement
a. True
b. False
3. Which of the following is an objective of financial reporting by business enterprises?
a. Financial reporting must give assurance that all liabilities of business enterprises will be paid
b. Financial reporting must show the timing and amount of future cash dividends to potential investors
c. The primary focus of financial reporting is information about the assets of entity.
d. Financial reporting must provide information about the economic resources of an enterprise, the claims to those resources, and changes in those resources and claims to them.
4. Owned resources of a business are referred to as:
a. Assets
b. Liabilities
c. Equities
d. Revenues
5. The accounting equation may be expressed as:
a. Assets=Equities - Liabilities
b. Assets + Liabilities = Owner's Equity
c. Assets = Revenues less Liabilities
d. Assets - Liabilities = Owner's Equity
6. The asset created by business when it makes a sale on account is termed as:
a. Accounts payable
b. Prepaid expense
c. Unearned revenue
d. Accounts receivable
7. Income from operations would comprise all of the given except
a. Sales
b. General and administrative expenses
c. Cost of goods sold
d. Gains and losses on the sale of assets