1-1 Objective Demos Flashcards
Identify if the statement aligns with the objective of financial reporting:
“Financial reporting consists of general-purpose financial statements, such as an income statement and a cash flow statement, that serve the needs of investors and creditors”
Aligned
Identify if the statement aligns with the objective of financial reporting:
“Financial reporting consists of a number of specialized financial reports that meet the explicit needs of a variety of user groups within a company”
Not Aligned
Identify if the statement aligns with the objective of financial reporting:
“Primary users of financial reporting are a company’s managers who make decisions for daily operations”
Not Aligned
Identify if the statement aligns with the objective of financial reporting:
“Intended users of financial reporting include individuals who are considering whether to purchase stock in the company”
Aligned
Identify if the statement aligns with the objective of financial reporting:
“Financial reporting includes both cash-based reporting and accrual-based reporting”
Aligned
Identify if the statement aligns with the objective of financial reporting:
“A shareholder or owner of a company is able to obtain financial information (such as a monthly sales) by inquiring directly to the company’s management. This means financial reporting is beneficial, but not critical, to an investor”
Not Aligned
Identify if the statement aligns with the objective of financial reporting:
“Financial reporting is necessary because investors and creditors make decisions that require allocation of limited resources”
Aligned
True or false:
Management reports are prepared primarily for internal users.
True
True or false:
Financial reporting is indirectly concerned with stockholders and creditors.
False
True or false:
A company can choose the types of financial statements to report according to the needs of external users.
False
True or false:
Providing both cash-basis and accrual-basis information through financial reporting is beneficial to external users.
True
True or false:
The addition of notes following financial statements is an optional way for companies to communicate information with investors.
False
True or false:
Financial reporting focuses primarily on internal users of financial statements.
False
