Chapter one- MCQs

1) In regards to the financial statement, usefulness of information is applicable to below points

except:
a. Financial position
b. Policies and strategies of management
c. Insight into future performance
d. Training for the staff

2) In terms of volume of information, which one must be included?

a. Financial statements
b. Notes to the financial statements
c. Auditor’s report
d. All of the above

3) The Financial Statements are:

a. Balance sheet (or statement of financial position)
b. Income statement (or earnings statement)
c. Statement of stockholders’ equity
d. Statement of cash flows
e. All of the above

4) Notes to the Financial Statements must include:

a. Ending inventory account
b. Summary of the firm’s accounting policies
c. The date of the Balance sheet
d. A and B

5) Which one of these must be included in Management Discussion and Analysis (MD & A)?
a. Coverage of trends, capital resources
b. Allowance of doubtful account
c. Financial year
d. B and C

6) The statement of cash flows provides information about the of:

a. Operating cash inflows and outflows

b. Financing cash inflows and outflows
c. Investing activities cash inflows and outflows
 d. All of the above

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True or False
1. A qualified report is issued when the overall financial statements are fairly presented:
True

2. Timing of Revenue and Expense Recognition recognizes revenues when earned and
expenses when incurred. True

3. Auditor’s Report attests to the fairness of the presentation of financial statements. True

4. The statement of stockholders’ equity reconciles the beginning and ending balances of all
accounts that appear in the stockholders’ equity section of the balance sheet. True

5. Global Economy needs for international accounting standards. True

6. Proxy Statement is used to solicit preferred stockholders votes. False