The primary objective of financial reporting is to provide information.

 Determine the response that best completes the following statements or questions.
 
1. The primary objective of financial reporting is to provide information.
 

    About a firm's financing and investing activities.
    Useful to capital providers.
    Concerning the changes in financial position resulting from the income-producing efforts of the entity.
    About a firm's management team.

Answer
Useful to capital providers
 
2. Statements of Financial Accounting Concepts issued by the FASB
 

    Are subject to approval of the SEC.
    Identify the conceptual framework within which accounting standards are developed.
    Have been superseded by SFASs.
    Represent GAAP.

Answer
 Identify the conceptual framework within which accounting standards are developed
 
3. In general, revenue is recognized when
 

    The sales price has been collected.
    A purchase order has been received.
    A contract has been signed.
    A good or service has been delivered to a customer.
    Answer
    A good or service has been delivered to a customer


 
4. In depreciating the cost of an asset, accountants are most concerned with
 

    Full disclosure.
    Conservatism.
    Recognizing expense in the appropriate period.
    Recognizing revenue in the appropriate period.

Answer
Recognizing expense in the appropriate period
 
5. The primary objective of expense recognition is to
 

    Promote comparability between financial statements of different periods.
    Provide full disclosure.
    Record expenses in the period that related revenues are recognized.
    Provide timely information to decision makers.

Answer
Record expenses in the period that related revenues are recognized
 
6. The separate entity assumption states that, in the absence of contrary evidence, all entities will survive indefinitely.
 

    False
    True
     
    Answer
    False