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CH 6

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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Jao Flores
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178 views2 pages

CH 6

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.

Uploaded by

Jao Flores
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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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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