1. Which one of the following accounting concepts would give you the most confidence that the financial statements were comparable year after year?

A.Verifiability

B.Conservatism

C. Consistency

2. Which one of the following situations would best be addressed by looking at financial accounting information?

a. You want to do a cost-benefit analysis regarding expanding your store to an additional location across town.

B. You are a production manager trying to budget next months production in units.

C. You are considering investing in a publicly traded corporation.

3. Why would it be important to disclose a possible going concern issue?

A. Investors and creditors presume that the firm is ongoing and that assets, liabilities, and results of operations, and therefore the stock price, reflect that presumption.

B. Internal accountants need that information in order to schedule production runs and operations schedules.

C. Management needs to know what to write in the MD&A section of the annual report.

4. Generally Accepted Accounting Principles are promulgated (enacted) by the ________.

A. Internal Revenue Service (IRS)

B. Financial Accounting Standards Board (FASB)

C. International Accounting Standards Board (IASB)

5. In accrual basis accounting, to realize revenue means that it has been ________.

A. recognized

B. received

C.recorded

6. Which part of the annual report would you read if you were interested in prospects for the future?

A. The balance sheet

B. The statement of cash flows

C. Managements Discussion and Analysis

7. Ethical violations ________.

A. are unique to publicly traded corporations

B. can happen at all levels of an organization

C. are always criminal acts as well

8. Financial accounting standards are set with ________ users in mind.

A. internal

B. external

C. managerial

9. A manufacturing company has multiple small plants in the Pacific Northwest. Each plant is headed up by a plant manager, but major decisions regarding what and how much is produced at each plant is made by the executive staff at the company's headquarters. This suggests that the company ________.

A. is a decentralized organization

B. has a functional structure

C. is an informal organization

10. In forming a partnership, it is always a good idea to have ________.

A. shareholders

B. less than three partners

C. a written partnership agreement