0cr 2203 Pinancial Accounting Review Fall 2013 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question 1) 1) The separate entity assumption means: A) each separate entity that has a claim on a company's assets must be shown in the financial statements. B) each separate owner's finances must be revealed in the financial statements. C) a company's financial statements reflect only the business activities of that company D) if the business is a sole proprietorship, the owners' personal activities are included in the company's financial statements. 2) 2) Which of the following statements about financial accounting is correct? A) Financia B) Financial accounting reports are used primarily by management to undernstand C) Financial accounting reports are primarily prepared to provide information for D) Financial accounting reports are used primarily by employees to make business I accounting reports primarily contain detailed internal records of the company whether a product line should be discontinued. external decision makers. decisions related to production. 3 3) Financing that individuals or institutions have provided to a corporation is: A) classified as a stockholders' equity when provided by creditors and a liability when provided by owners. B) always classified as a liability C) always classified as equity. when provided by owners. 4) Which of the following is not correct? D) classified as a liability when provided by creditors and as stockholders' equity A) Stockholders' Equity +Liabilities-Assets-0 B) Liabilities Assets-Stockholders' Equity C) Assets Liabilities - Stockholders' Equity D) Assets - Liabilities + Stockholders' Equity