Multiple Choice:

1. The organization that presently has the primary responsibility to establish generally accepted accounting principles that are applicable to the financial statements of entities in the private sector of the U.S. and P.R. is the:

a. Accounting Principles Board

b. Securities and Exchange Commission

c. Financial Accounting Standards Board

d. Committee on Accounting Procedure

2. Going from 1938 to the present, which is the correct sequence of accounting rule-making bodies?

a. APB-CAP-FASB

b. CAP-FASB-APB

c. CAP-APB-FASB

d. FASB-APB-CAP

3. The Securities and Exchange Commission has the legal authority to prescribe accounting principles and reporting practices for:

a. all companies issuing publicly traded securities.

b. all companies issuing any type of securities.

c. all companies.

d. all corporations.

4. The four major financial statements of a corporation consist of the:

a. income statement, balance sheet, statement of cash flows and statement of changes in stockholders' equity.

b. balance sheet, statement of cash flows, statement of retained earnings, and income statement

c. income statement, statement of cash flows, statement of owners' equity, and balance sheet

d. Statement of cash flows, balance sheet, income statement, and statement of capital equity

5. According to the recognition criteria established for revenue, revenue is normally recognized.

a. during production

b. at the completion of production

c. at the point of sale

d. when the cash is received from the customer

6. All of the following items are classified as accounting assumptions and conventions except for:

a. Going concern

b. Timeliness

c. Monetary unit

d. Entity

7. Under current GAAP, most resources of a business entity are to be valued in its financial statements at:

a. a value that is most relevant to the needs of users of the financial statements).

b. historical cost

c. the current cost of replacing the resource

d. current appraisal values

8. Which of the following characteristics must an economic resource have in order to be classified as an asset?

a. the resource was acquired as a result of a past transaction

b. the resource must have future service potencial

c. the access to the asset must be under the control of the business entity

d. all of the above

e. none of the above