TRUE-FALSEConceptual

1. Financial statements are the principal means through which financial information is communicated to those outside an enterprise.

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2. Capital markets are increasingly integrated, and companies have greater flexibility in deciding where to raise capital.

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3. The major financial statements used under International Financial Reporting Standards (IFRS) include the statement of changes in financial position and the statement of stockholders equity.

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4. Investors and creditors are considered the primary user group of general-purpose financial reporting.

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5. International Financial Reporting Standards preceded International Accounting Standards.

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6. The IFRS Foundation appoints members, reviews effectiveness, and helps in the fundraising efforts of the IASB, IFRS Advisory Council, and IFRS Interpretations Committee

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MULTIPLE CHOICE

1. The financial statements most frequently provided include all the following except the

a.statement of financial position.

b.income statement.

c.statement of cash flows.

d.statement of retained earnings

2. How does accounting help the capital allocation process attract investment capital?

a.Provides timely, relevant information.

b.Encourages innovation.

c.Promotes productivity.

d.Fosters changes in equity.

3. General-purpose financial statements are the product of

a.financial accounting.

b.managerial accounting.

c.both financial and managerial accounting.

d.neither financial nor managerial accounting.

4. Which of the following parties are likely to use financial reports prepared using the financial accounting process?

a.Creditors.

b.Government agencies.

c.Unions.

d.All of these answer choices are correct.