1.

Gross profit methods of estimating inventory relies on the following assumptions except
a. Beginning inventory plus purchases equal total goods to be accounted for.
b. Goods not sold must be on hand.
c. The sales, reduced to cost, deducted from the sum of the opening inventory plus
purchases, equal ending inventory.
d. None of the above
2. Understating beginning inventory will understate

a. assets. c. net income.

b. cost of goods sold. d. owner's equity.

3. Overstating ending inventory will overstate all of the following except

a. assets. c. net income.

b. cost of goods sold. d. owner's equity.

4. Which of the following is correct about the objectives of general-purpose financial reporting?
a. Provide financial reporting information to a wide variety of users.
b. Provide the most useful information possible at the least cost.
c. Investors are considered the primary user group.
d. Helps investors assess the amounts, timing and uncertainty of prospective cash inflows.
e. All of the above
5. An independent organization (s) whose mission is to develop, a single set of high quality,
understandable and international financial reporting standards (IFRSs) for general purpose
financial statements

a. FASB d. IOSCO
b. IASB e. All of the above
c. SEC

6. The process of associating numerical amounts with the elements refers to

a. Recognition c. Disclosure
b. Measurement d. None of the above

7. The two major standard-setting organizations in the world.:

a. IASB and FASB. c. IOSCO and the SEC.

b. SEC and FASB. d. IASB and IOSCO.

8. An independent organization whose mission is to facilitate cross-border cooperation, reduce

global systemic risk, protect investors, and ensure fair and efficient securities markets.

a. FASB d. SEC
b. IASB e. All of the above
c. IOSCO

9. Using the same accounting treatment to similar events from period to period is known as:

a. Timelines b. Comparability
c. Consistency
d. Periodicity