Part A 1. Which of the following is the primary objective of financial statements? A. Providing managers with detailed information tailored to the managers' specific information needs. B. Providing people outside the business organization with information about the company's financial position and operating results. C. Reporting to the tax authority the company's taxable income. D. Indicating to investors in a particular company the current market values of their investments. 2. Which of the following is generally not considered one of the general purpose financial statements issued by a corporation? A. Income statement forecast for the coming year. B. Income Statement. C. Statement of financial position. D. Statement of cash flows. 3. The valuation of assets in the statement of financial position is based primarily upon: A. What it would cost to replace the assets. B. Cost, because it is usually factual and verifiable. C. Current fair market value as established by independent appraisers. D. Cost, because in the event of liquidation, the assets would be sold at an amount equal to their original cost. 4. The owner of Westhampton Fish Eatery purchased a new car for his daughter who is away at college at a cost of $43,000 and reported this amount as Delivery Vehicle in the restaurant's statement of financial position. The reporting of this item in this manner violated the: A. Cost principle. B. Business entity concept C. Objectivity principle. D. Going-concern assumption. 5. The balance sheet item that represents the portion of equity resulting from profitable operation of the business is: A. Accounts receivable. B. Cash. C. Share capital. D. Retained earnings