1. When a company uses cash-basis accounting, it frequently does not keep up with

a. accounts payable.

b. prepaid expenses.

c. the company keeps up with all of these choices.

d. accounts receivable.

2. The joint IASB and FASB boards identified several "enhancing" decision useful characteristics of financial information including

a. comparability, verifiability, timeliness, and understandability

b. materiality, verifiability, timeliness, and understandability

c. comparability, relevance, timeliness, and understandability

d. comparability, verifiability, timeliness, and materiality

3. Which one of the following assumptions or principles most logically supports the preparation of a single set of consolidated financial statements that combines the financial information of several wholly owned but separately identifiable businesses?

a. historical cost

b. reporting entity

c. industry practices

d. materiality

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4. Which of the following statements is not true with regard to the benefits derived from the FASB's conceptual framework of accounting?

a. The Statements of Financial Accounting Concepts is the primary source of GAAP for accountants.

b. It enhances comparability between different company's financial statements.

c. It serves as a guide in establishing standards for the FASB.

d. It establishes the objectives of financial reporting.