Part One: Multiple Choices 1. The overall objective of financial reporting is to provide information a. that is useful for decision making. b. about an enterprise's assets, liabilities, and owners' equity. c. about an enterprise's financial performance during a period. d. that allows owners to assess management's performance. c. All of the above choices are correct. 3. Which of the following is NOT normally an objective of financial reporting? a. To provide information about an entity's assets and claims against those assets b. To provide information that is useful in assessing an entity's sources and uses of cash c. To provide information that is useful in lending and investing decisions d. To provide information about an entity's liquidation value c. All of the above choices are objectives of financial reporting 5. The of a firm is primarily responsible for the preparation of financial statements in accordance with IFRSs. a. the internal auditors. b. management. e, the external auditors. d. the board of directors. e. all of the above choices are correct 7. An item would be considered material and therefore would be disclosed in the financial statements if the a expected benefits of disclosure exceed the additional costs. b. impact on carnings is greater than 3 percent. c. IASB definition of materiality is met. d. omission of misstatement of the amount would make a difference to the users. e. all of the above choices are correct 9. Financial information exhibits the characteristic of consistency when a. accounting procedures are adopted which smooth net income and make results consistent between years. b. extraordinary gains and losses are shown separately on the income statement. c. accounting entities give similar events the same accounting treatment each period. d. expenditures are reported as expenses and netted against revenue in the period in which they are paid. c. all of the above choices are correct 11. Which of the following statements regarding assets is NOT true? a. An asset represents a probable future economic benefit. b. Assets are obtained or controlled as a result of past or probable future transactions or events. c. Assets reported on the balance sheet include both monetary and nonmonetary resources. d. Assets include costs that have not yet been matched with revenues. 13. Decision makers vary widely in the types of decisions they make, the methods of decision making they employ, the information they already possess or can obtain from other sources, and their ability to process information. Consequently, for information to be useful there must be a linkage between these users and the decisions they make. This link is