1) What is the purpose of information presented in the notes to the financial statements?
a. To provide disclosure required by generally accepted accounting principles
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 response to auditor comments
2) True/False: Revenues, gains, and distributions to owners all increase equity.
3) What is a purpose of having a conceptual framework?
a. To make sure that economic activity can be identified with a particular legal entity.
b. To segregate activities among different companies.
c. To provide comparable information for different companies.
d. To enable the profession to more quickly solve emerging practical problems and to provide a foundation from which to build more useful standards.
4) Changing the method of inventory valuation should be reported in the financial statements because of which qualitative characteristic of accounting information?
a. Consistency
b. Verifiability
c. Timeliness
d. Comparability