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Multiple Choice Questions: 1. Objective accounting information a. cannot be used in the financial statements. b. requires that values of transactions and related assets and

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Multiple Choice Questions: 1. Objective accounting information a. cannot be used in the financial statements. b. requires that values of transactions and related assets and liabilities created by them be arbitrarily determined. C. ensures that revenue matches expenses for every accounting period. (d) states that financial accounting information must be reliable and verifiable. 2. Bixby Machine Company makes a large sale for $1,400,000 on November 30. The customer is sent a statement on December 5; a check is received on December 10. Bixby follows U.S. GAAP and applies the revenue recognition principle. When is the $1,400,000 in revenue recognized by the company? a. December 1. b. December 10. c., December 5. d. November 30. 3. Which one of the following statements is true? a. When determining materiality, a dollar amount should affect both small and large companies the same way. b. In determining materiality, the size of an item is mainly considered. c. Materiality is specifically defined in the financial accounting standards. d. A creditor's definition of materiality is the same as an investor's definition. 4. Which of the following is a valuation base definition of original cost," in terms of an entity's input and output costs? a. Current sales price in output market. b. Discounted future cash flows from input or output markets. c. Historical cost in input market. d. Current cost to replace the input market. 5. Which of the following annual report footnote disclosures best exhibits the use of the fiscal period assumption? a. Company counsel has indicated that the company has lost its last appeal in a class-action suit related to the company's leading consumer product. Because o this event, we anticipate an adverse effect on the company's continued operatio for the next fiscal year

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