(3 points each) 1. A common set of accounting standards and procedures are called a. financial accounting standards. b. generally accepted accounting principles. c. objectives of financial reporting. d. statements of financial accounting concepts. 2. The two fundamental qualitios that make accounting information useful for decision making are a. comparability and timelinesss. b. materiality and neutrality. c relevance and faithful representation. d. faithful representation and comparability. What accounting concept justifies the usage of depreciation and amortization policies? a Going concern assumption b. Fair value principle Full disclosure principle d. Monetary unit assumption 3 C 4. An adjusting entry should never include a. a debit to an expense account and a credit to a liability account b. a debit to an expense account and a credt to a revenue account c a debit to a liability account and a credit to revenue account d. a debit to a revenue account and a credit to a liability account For Mortenson Company, the following information is available 5 Cost of goods sold Dividend revenue Income tax expense Operating expenses Sales revenue $120,000 5,000 12,000 46,000 200,000 In Mortenson's muiltiple-step income statement, gross profit a. should not be reported b. should be reported at $27,000 c should be reported at $80,000, d. should be reported at $85,000 In preparing a statement of cash flows, sale of treasury stock at an amount greater than cost would be classfied as aln) a operating activity. b. financing activity c extraordinary activity. d. investing activity 6