MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question. 1) 1) A debt that a corporation owes to an outside party is called A) a liability C) revenue. B) an asset. D) stockholders' equity 2) By definition, which of the following represent the owners of a corporation? 2) A) Creditors B) Employees C) Customers D) Stockholders 3) Which of the following statements BEST defines financial statements? 3) A) Financial statements are the information system that records and measures business transactions. B) Financial statements are plans and forecasts for future time periods. C) Financial statements are documents that report on a business in monetary terms, providing information to help people make informed business decisions. D) Financial statements are the verbal statements made to business news organizations by chief financial officers. 4) Many organizations have contributed to the establishment of generally accepted accounting 4) principles. Which of the following organizations has the primary responsibility for formulating accounting standards? A) FASB B) SEC C AICPA D) CMA 5) Which of the following is a licensed accountant who serves the general public rather than an 5) accountant who serves one particular company? A) SEC B) CPA C) CMA D) FASB 6) The primary objective of financial reporting is to provide information useful for makin 6) investment and lending decisions. Which of the following is NOT one of the basic characteristics that financial information must possess to be useful? A) Creativity B) Reliability C) Relevance D) Comparability 7) Accountants often refer to GAAP. What do the letters GAAP represent in accounting? 7) A) Generally accredited accounting policies B) Global accommodation accounting principles C) Generally accepted accounting principles D) Globally accepted and accurate policies S wing oranizations requires publidy owned companies to be audited by 8) Which of the following organizations requires publicly owned companies to be audited by 8) independent accountants (CPAs)? A) FASB B) PCAOB C) SEC D) AICPA 9) You can evaluate business performance in terms of profitability by analyzing which of the 9) following financial statements? A) Statement of cash flows C) Income statement B) Balance sheet D) None of the above 10) You can evaluate the economic resources, debt, and overall financial position of a resources, debt, and overall financial position of a company in 10) which of the following financial statements? A) Statement of cash flows B) Income statement