1. A company‘s financial statements reflect information about: a) future project

Question

1. A company‘s financial statements reflect information about:
a) future projections o‘ sa.es excesses. and other future economic events.
b) product information and competitive positions.
c) the general economy of the industry in which the company operates.
d) economic events that affect a company that can be translated into accounting
numbers.

2. Reliable information is:
a) consistent. unbiased. and relevant.
b) relevant, comparable. and timely.
c) relevant, consistent, and timely.
d) factual, truthful, and unbiased.

3. The "critical event" for revenue recognition is;
a) defined by generally accectec accounting principles for every situation.
b) the same for every industry.
c) dependent upon the exact nature of the business and industry.
d) easily defined by the FASB.

4. The best measure of a firm's sustainable income is:
a) income from continuing operations.
b) income before extraordinary items.
c) income before extraordinary item and change in accounting principle.
d) net income.

Explanation / Answer

1. A company‘s financial statements reflect information about: b) product information and competitive positions. 2. Reliable information is: d) factual, truthful, and unbiased. 3. The "critical event" for revenue recognition is; c) dependent upon the exact nature of the business and industry. 4. The best measure of a firm's sustainable income is: a) income from continuing operations.

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