1.
The two major components of financial reporting are the:
A. 
Annual report and Form 10-K
B. 
Balance sheet and Form 10-K
C. 
Income statement and Form S-K
D. 
Annual report and Form S-K
2.
The report, prepared from financial information, which
uses the equation “revenue less expenses equals net income” is called the:
A. 
Statement of financial position
B. 
C. 
D. 
3.
There are several reports prepared from financial
accounting information. The report that focuses on the present condition of a
business and is based on the model that states “assets must equal liabilities
plus owners’ equity” is called the:
A. 
Statement of owners’ equity
B. 
C. 
D. 
4.
The mental and physical efforts of people who are
involved in running a business are also referred to as:
A. 
B. 
C. 
D. 
5.
Most countries’ economic health depends on the importing
and exporting of goods. However, such commerce among countries can cause:
A. 
An economic complication such as the use of different currencies among nations
B. 
A political complication such as a country wishing to protect its own self-interests
C. 
An economic complication such as countries with different types of economies
D. 
All of the answers above are correct.
6.
A document issued by the FASB that defines the problem,
explains issues, and offers several alternatives is a(n):
A. 
B. 
C. 
D. 
7.
To be truly useful to decision-makers, financial
statements must be analyzed. Many financial statement users consider the
relationship between assets and liabilities on the balance sheet to be
extremely important. This relationship is known as the:
A. 
B. 
C. 
D. 
None of these answers are correct.
8.
When compared to a sole proprietorship, partners in a
partnership are at a disadvantage because the partners have:
A. 
More management expertise
B. 
C. 
Fewer government regulations
D. 
No special income taxes to pay
9.
In which respect is a limited partner in a limited partnership "limited"?
A. 
They are limited to corporations
B. 
They are subject to double taxation
C. 
They have limited liability
D. 
They are not permitted to share company profits
10.
One challenge a company faces today is determining exactly who its stakeholders are and what responsibility it has to them. The stakeholders of a company include:
A. 
B. 
C. 
D. 
All of the answers above are correct
11.
The financial information report that uses the company's net income as one amount in an equation to arrive at the ending amount is knows as:
A. 
B. 
Statement of owners' equity
C. 
D. 
12.
An item that is optional, but often included in the annual report, is the:
A. 
Independent auditors' report
B. 
Management Discussions and Analysis
C. 
D. 
Consolidated Balance Sheet
13.
A business owner has only limited access to capital to
operate and expand his or her business. This disadvantage is a characteristic
of the business form known as a:
A. 
B. 
C. 
D. 
14.
Which of the following items is optional when included
in an annual report?
A. 
Consolidated Statement of Cash Flows
B. 
Managements Discussion and Analysis
C. 
D. 
Independent Auditors' Report
15.
A person who is willing to accept the opportunities and
risks of starting a business is a(n):
A. 
B. 
C. 
D. 
16.
When the auditor states an exception to the audit
report, he/she issues a(n):
A. 
B. 
C. 
D. 
17.
Many companies today are committed to
responsible and ethical business practices, and they make it a point of
communicating that commitment to investors, employees, and the general public.
Anyone to whom the company owes a responsibility is called a(n):
A. 
B. 
C. 
D. 
18.
A form of business that allows the individual to take
risks and reap the rewards of ownership and any profitability is known as a:
A. 
B. 
C. 
D. 
19.
________ is (are) the things of value a company owns or
controls, and __________ represent(s) the debts or obligations of the company.
A. 
B. 
C. 
D. 
Owners’ equity; liabilities
20.
Jasmine sells flowers for $25 per bunch. The flowers
cost Jasmine $14 per bunch. The delivery driver charges $5 per delivery and the
clerk is paid $2 for each order processed. If Jasmine sells 8 bunches of
flowers, what is the net income that she'll receive?
A. 
B. 
C. 
D.