True/ False (T or F Questions (10@3-30 points) 1. Accounting is an information and measurement system that identifies, records, and 2. The primary objective of financial accounting is to provide general purpose financial 3. External users include lenders, shareholders, customers, and regulators. 4. The Sarbanes-Oxley Act (SOX) does not require public companies to apply both accounting 5. In the partnership form of business, the owners are called stockholders. 6. The Financial Accounting Standards Board (FASB) is the private group that sets both broad 7. The three common forms of business ownership are sole proprietorship, partnership, and non- 8. Expenses decrease equity and are the costs of assets or services used to earn revenues. 9. The balance sheet is also called the statement of financial position because it describes the communicates relevant, reliable, and comparable formation about an organization's business activities statements to help external users analyze and interpret an organization's activities. oversight and stringent internal controls. and specific accounting principles. profit. financial position of the business at a point in time. 10. Return on assets is also known as return on investment. Multiple Choice Questions: Circle the best answer (10 @4-40 points) 11. The accounting process begins with: A. Analysis of business transactions and source documents B. Preparing financial statements and other reports. C. Summarizing the recorded effect of business transactions. D. Presentation of financial information to decision-makers. E. Preparation of the trial balance. 12. Which of the following statements is correct? A. When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense. B. Promises of future payment are called accounts receivable. C. Increases and decreases in cash are always recorded in the owner's capital account. D. An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. E. Accrued liabilities include accounts receivable