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    CH 6

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    Jao Flores
    This document contains multiple choice questions that test understanding of the primary users of financial reports and their information needs. The primary users are identified as creditors, existing and potential investors, lenders and other creditors. The questions address which users are interested in information about profitability, stability, ability to pay debts, employment opportunities, and regulatory compliance.

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    CH 6

    Uploaded by

    Jao Flores
    129 views2 pages
    This document contains multiple choice questions that test understanding of the primary users of financial reports and their information needs. The primary users are identified as creditors, existing and potential investors, lenders and other creditors. The questions address which users are interested in information about profitability, stability, ability to pay debts, employment opportunities, and regulatory compliance.

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    Ch 6.docx

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    This document contains multiple choice questions that test understanding of the primary users of financial reports and their information needs. The primary users are identified as creditors, existing and potential investors, lenders and other creditors. The questions address which users are interested in information about profitability, stability, ability to pay debts, employment opportunities, and regulatory compliance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    129 views2 pages

    CH 6

    Uploaded by

    Jao Flores
    This document contains multiple choice questions that test understanding of the primary users of financial reports and their information needs. The primary users are identified as creditors, existing and potential investors, lenders and other creditors. The questions address which users are interested in information about profitability, stability, ability to pay debts, employment opportunities, and regulatory compliance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    PROBLEM 2-6 MULTIPLE CHOICE (ACP)

    1. Users of financial reports include which of the following>


    a. Creditors
    b. Creditors and government agencies
    c. Creditors and unions
    d. Creditors, government agencies and unions
    2. The “primary users” of financial information include
    a. Existing and potential investors
    b. Existing and potential lenders and other creditor
    c. User group such as employees, customers, governments and their agencies, and the
    public
    d. Existing and potential investors, lenders and other creditors
    3. Which of the following is an internal user of financial information?
    a. Board of Directors
    b. Shareholder
    c. Holder of bonds
    d. Creditor with long term contracts

    4. The users require information on risk and return provided by their investment.
    a. Investors
    b. Employees
    c. Lenders
    d. Customers
    5. These users are interested in information about the profitability and stability of the entity in
    order to assess the ability of entity to provide remuneration, retirement benefits and
    employment opportunities.
    a. Customers
    b. The public
    c. Governments and their agencies
    d. Employees
    6. These users are interested in information that enables them to assess whether their loans,
    the related interest thereon, and other amounts owing to them will be paid when due.
    a. Lenders and other creditors
    b. Borrowers
    c. Trade creditors
    d. Owners
    7. These users are interested in information about the continuance of an entity, especially when
    they have a long term involvement with or are dependent on the entity.
    a. Customers
    b. Employees
    c. Trade unions
    d. Suppliers
    8. These users are interested in information in order to regulate the activities of an entity,
    determine taxation policies and provide a basis for national statistics.
    a. Governments and their agencies
    b. Major organization of users
    c. Bureau of Internal Revenue
    d. Department of Finance
    9. These users need information on trends and recent developments where an entity makes a a
    substantial contribution to the local economy providing employment and using local
    suppliers.
    a. The public
    b. Governments and their agencies
    c. Finance entities
    d. Private entities

    PROBLEM 2-7 MULTIPLE CHOICE (IAA)


    1. What is the objective of financial reporting?
    a. To provide information about the financial position and financial performance of an
    entity.
    b. To provide financial information about an entity that is useful to existing and potential
    investors, lenders and other creditors in making decisions about providing resources to
    the entity.
    c. To prepare a statement of financial position, a statement of comprehensive income and
    statement of cash flows.
    d. To prepare financial statements in accordance with all applicable standards and
    interpretations.

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