WorksheetsCFAB - Accounting 1 - Chapter 1 - Revision
Total questions: 10
Worksheet time: 7mins
Financial accounting provides internal reports to help users make decisions about their companies.
A. True
B. False
Which of the following statements about users of accounting information is incorrect?
A. Management is an internal user.
B. Taxing authorities are external users
C. Present creditors are external users.
D. Regulatory authorities are internal users.
Two FUNDAMENTAL qualities of useful financial information
A. Relevance
B. Comparability
C. Verifiability
D. Faithful Representation
The information is .................. when it includes everything necessary to reflect what happened for all of the business activities for which the firm is reporting.
A. Complete
B. Neutral
C. Free from error
D. Verifiable
The information is ______ if the financial statements are objectively prepared and free from bias (not favoring a particular group over the others).
A. Complete
B. Free from error
C. Neutral
D. Relevant
Comparability, timeliness, verifiability, and understandability are
A. Fundamental characteristics of useful accounting information
B. Enhancing characteristics of useful accounting information
C. Modifying principles of financial reporting
D. Basic accounting assumptions
Information becomes more useful if it can be compared with similar information about other entities and with similar information about the entity for another period or another date.
A. True
B. False
This enhancing quality means that the information is made available to decision makers when needed, or in a timely manner to be capable of influencing the users’ decisions.
A. Comparability
B. Timeliness
C. Verifiability
D. Understandability
This enhancing quality refers to a financial information that is classified, characterized, and presented clearly, and concisely.
A. Comparability
B. Timeliness
C. Verifiability
D. Understandability
This enhancing quality assures users that the information faithfully represents the data it intends to communicate.
A. Comparability
B. Timeliness
C. Verifiability
D. Understandability
