1.

Which would likely prepare the most accurate financial forecast for an entity based on empirical
evidence
Corporate management
investors using statistical models
financial analysts
independent CPAs
2. What is the most useful information in predicting future cash flows
Current earnings based on accrual accounting
Information regarding the results obtained by using a wide variety of accounting policies
3. The accrual basis of accounting is most useful for
Predicting the long-term financial performance
4. In measuring financial performance, accrual accounting is used because
It provides a better indication of ability to generate cash flows than cash basis
It is one of the implicit assumptions
5. the financial statements prepared under GAAP
Are not highly precise because estimate and judgment must be made
Do not articulate with one another
Reflect a single measurement which is historical cost
Contain a limited number of future projections