$1)$ Financial statements provide information about business activities to decision makers.

a$.$ True

b$.$ False

$2)$ The primary objective of financial reporting is to provide information:

a$.$ regarding the cash flows of the business

b$.$ useful for making investment decisions and for assessing management's stewardship.

c$.$ to the federal government

d$.$ about the profitability of the business

$3)$ Audits conducted by external accountants express an opinion:

a$.$ that gives investors$$ confidence their investment is not at risk.

b$.$ that evaluates the effectiveness of management.

c$.$ that taxing authorities use to ensure that the correct amount of tax owing has been calculated.

d$.$ on whether the financial statements fairly reflect the economic events that occurred during the

accounting period.

$4)$ Rules of professional conduct for accountants should:

a$.$ be the same as those for lawyers or engineers

b$.$ not be seen as strict when the client requests certain requirements

c$.$ be considered a minimum standard of performance

d$.$ clearly spell out right from wrong in every situation.

$5)$ A proprietorship can have two owners, so long as they are husband and wife.

a$.$ True

b$.$ False

$6)$ In a corporation, the shareholders have liability for the actions of the corporation that extends

beyond their investment.

c$.$ True

d$.$ False

$7)$ An organization, for accounting purposes, stands apart from other organizations and individuals

as a separate accounting entity.

e$.$ True

f$.$ False

$8)$ GAAP stands for:

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a$.$ generally accrued auditing procedures.

b$.$ generally accrued accounting principles.

c$.$ generally accepted accounting principles.

d$.$ generally accepted auditing practices.

$9)$ The accounting equation can be stated as assets $+$ liabilities $=$ owner's equity.

a$.$ True

b$.$ False

$10)$ An owner investment would increase the assets and decrease the liabilities of the firm.

a$.$ True

b$.$ False