Financial Reporting MCQs

Practice and Learn through MCQs and Quizzes. have 2 Financial Reporting MCQs

Accounting MCQ2- Notes to financial statements are beneficial in meeting

  • A. Describe significant accounting policies.
  • B. Describe depreciation methods employed by the company.
  • C. Describe principles and methods peculiar to the industry in which the company operates, when these principles and methods are predominantly followed in that industry.
  • D. Correct an improper presentation in the financial statements.
  • Answer (D) is correct. Financial statement notes should not be used to correct improper presentations. The financial statements should be presented correctly on their own. Notes should be used to explain the methods used to prepare the financial statements and the amounts shown. The first footnote typically describes significant accounting policies.
  • Correct Answer: Option D

Accounting MCQ3- An objective of financial reporting is

  • A. Providing information useful to investors, creditors, donors, and other users for decision making
  • B. Assessing the adequacy of internal control
  • C. Evaluating management results compared with standards
  • D. Providing information on compliance with established procedures
  • Answer (A) is correct. The objective is to report financial information that is useful in making decisions about providing resources to the reporting entity. Primary users of financial information are current or prospective investors and creditors who cannot obtain it directly. Their decisions depend on expected returns
  • Correct Answer: Option A