Q1. Who are the primary users of financial reports? A. Investors and employees. B. investors and lenders. C. Employees and lenders. D. investors and customers. Q2. Expenses of an accounting period which remains unpaid at the end of accounting period are: A. Unexpired expense B. Outstanding expense. C. Prepaid expense. D. Direct expense. Q3. What happens if accounting records are maintained on accrual basis? A. Income and expenditure relating to the accounting period should be fully accounted for even if income is still to be received and expenditure is yet to be paid for. B. Income should be accounted on accruals basis and expenditure on payments basis. C. Expenditure should be accounted for only to the extent they have been paid for D. Income should be accounted for only when received. 04. Exempt Private Company is A. private company where the maximum number of shareholders is limited to 50 B. private company more than 20 shareholders, and none of the shareholders is a corporation C. private company not more than 20 shareholders, where at least one of the shareholders is a corporation D. private company not more than 20 shareholders, where none of the shareholders is a corporation Page 2 of 5 of Q5. The cost of acquisition of shares bought back is treated as a(n) the equity of the entity. The acquisition cost includes the purchase consideration incidental cost. A. Reduction, less B. Increase, less C. Increase, plus D. Reduction, plus