Update1-11. An entity that sprays chemicals in residences to eliminate or prevent infestation of insects requires that customers prepay for 3 months’ service at the beginning of each new quarter. Select the term that appropriately describes this situation from the viewpoint of the entity.
Describe significant accounting policies. , Describe depreciation methods employed by the company, Describe principles and methods peculiar to the industry in which thecompany operates, when these principles and methods are predominantlyfollowed in that industry, Correct an improper presentation in the financial statements.,
2. The financial statements included in the annual report to the shareholders are least useful to which one of the following?
Providing information useful to investors, creditors, donors, and other usersfor decision making., Assessing the adequacy of internal control., Evaluating management results compared with standards., Providing information on compliance with established procedures.,
3. Which of the following is true regarding the comparison of managerial and financial accounting?
Income statement., Statement of changes in equity., Statement of cash flows., Statement of financial position.,
4. A primary objective of external financial reporting is
Deferred income., Earned income., Accrued income., Prepaid expense.,
5. Notes to financial statements are beneficial in meeting the disclosure requirements of financial reporting. The notes should not be used to
Managerial accounting is generally more precise, Managerial accounting has a past focus, and financial accounting has afuture focus., The emphasis on managerial accounting is relevance, and the emphasis onfinancial accounting is timeliness., Managerial accounting need not follow generally accepted accountingprinciples (GAAP), while financial accounting must follow them.,
6. The accounting measurement that is not consistent with the going concern concept is
Stockbrokers., Bankers preparing to lend money. distance learning , Competing businesses., Managers in charge of operating activities.,
7. An objective of financial reporting is
Historical cost., Realization., The transaction approach., Liquidation value.,