1. Which of the following statements best describes the purpose of the cash flow statement?

A. To explain the sources and uses of cash during the accounting period
B. To determine the companys profitability during the fiscal year
C. To determine the level of debt the company must finance
D. Assess the competitive risks faced by the company.

2. Which of the following statements best describes the purpose of internal controls over financial reporting?

A. To reduce the likelihood that laws and regulation will be broken
B. To increase the likelihood that Generally Accepted Accounting Principles will be followed
C. To reduce the likelihood of the companys bankruptcy
D. To increase the likelihood that profitability will be achieved.