1. This field is concerned with decisions about where to obtain funds and how to spend or invest them.

   • accounting
   • marketing
   • finance
   • management

2. The income statement reflects an organizations actual cash flows.

   • True
   • False

3. Which of the following is a TRUE statement about accounting?

   • Companies should only have one set of accounting records.
   • There is one important metric to look for in financial statements.
   • There is subjectivity involved in application of particular accounting rules.
   • All of the above.

4. What should an annual report include?

   • An overview of the companys business and operations.
   • Some discussion and analysis of financial results.
   • Independent audit report.
   • All of the above.

5. If assets exceed liabilities, the difference is called ________________.

   • return on investment
   • liquidity
   • revenues
   • shareholders equity

6. The companys liabilities and assets are included in which of the following financial statements?

   • income statement
   • balance sheet
   • statement of operations
   • statement of cash flows

7. GAAP requires the use of ____________ so reported profits are not equal to actual firm cash flows.

   • accrual accounting
   • accounting
   • budgeting
   • shareholder accounting