1. Revenues are defined as __________.

a.	net cash inflow

b.	all of the above

c.	increase in net assets from providing goods or services

d.	decrease in net assets from providing goods or services

Question 2

A complete set of financial statements __________.

a.	includes the income statement, the balance sheet, the statement of retained earnings, and the statement of operating activities.

b.	does not include a balance sheet.

c.	includes the income statement, the balance sheet, the statement of financing activities, and the statement of cash flows.

d.	includes the income statement, the balance sheet, the statement of stockholders equity, and the statement of cash flows.

Question 3

Expenses are defined as __________.

a.	net cash outflow

b.	decrease in net assets from providing goods or services

c.	increase in net assets from providing goods or services

d.	all of the above

Question 4

The objective of the accrual basis accounting is to __________.

a.	match cash inflows of the period with their associated cash outflows.

b.	include revenue in the income statement of the period it is earned (regardless of when cash is received) and match costs incurred (expenses) against the revenue (regardless of when paid).

c.	report expected future accomplishments and link them to expected efforts.

d.	provide information for investors to assess current period cash flows.

Question 5

The term Quality of Earnings refers to

a.	the degree in which a firm reports income from transactions with local customers

b.	the currency in which the earnings are reported with EURO being of the highest quality

c.	the currency in which the earnings are reported with US $ being of the highest quality

d.	the degree in which a firms reported income is useful to determine future income

Question 6

Creditors use financial statements to determine:

a.	none of the above

b.	the bonus for the management of the company

c	the creditworthiness of the company

d.	the future stock price of the company

Question 7

Who are the primary users of managerial accounting?

a. Management

b.

Creditors

c.	Shareholders

d.

Students

Question 8

Shareholders use financial statements in order to make a decision on:

a.	none of the above

b.	buying the products of the company

c.	selling or holding the shares

d.	all of the above

Question 9

Which of the following is (are) important to users of financial statements in assessing the future cash flows of a firm?

a.	their timing

b.	all of the above

c.	their uncertainty

d.	their amounts

Question 10

Revenue is generally recognized in the income statement of the period in which

a.	the goods or services are provided to the customer or the cash is received

b.	the goods or services are provided to the customer and the cash is received

c.	the goods or services are provided to the customer whether or not the cash is received

d.	the cash is received whether or not the goods or services are provided to the customer