CHAPTER 1
Introduction to Financial Statements
Study Objectives
1.
Describe the primary forms of business organization.
2.
Identify the users and uses of accounting information.
3.
Explain the three principal types of business activity.
4.
Describe the content and purpose of each of the financial statements.
5.
Explain the meaning of assets, liabilities, and stockholder’s equity, and state the basic
accounting equation.
6.
Describe the components that supplement the financial statements in an annual report.
Summary of Questions by Study Objectives and Bloom’s Taxonomy
Item
SO
BT
Item
SO
BT
Item
SO
BT
Item
SO
BT
Item
SO
BT
Questions
1.
1
K
5.
2
C
9.
4
C
13.
5
AP
17.
5
C
2.
1
K
6.
2
C
10.
4
C
14.
5
K
18.
6
K
3.
1
K
7.
3
C
11.
4
K
15.
5
K
19.
6
C
4.
2
C
8.
4
K
12.
4
C
16.
5
AP
20.
6
K
Brief Exercises
1.
1
K
4.
4
C
6.
4, 5
K
8.
5
AP
10.
5
K
2.
2
K
5.
4, 5
AP
7.
4
K
9.
5
AP
11.
6
K
3.
4, 5
K
Exercises
1.
1, 2, 4,
6
K
5.
4
AP
8.
4, 5
AP
11.
5
AP
14.
5
AP
2.
3
C
6.
4
AP
9.
4, 5
AP
12.
5
AP
15.
5
AP
3.
3, 4
C
7.
4
C
10.
4, 5
AP
13.
5
AP
16.
6
K
4.
4
AP
Problems: Set A
1.
1
C
2.
2, 4,
5
K
3.
4, 5
A
4.
4, 5
AP
5.
4, 5
AP
Problems: Set B
1.
1
C
2.
2, 4,
5
K
3.
4, 5
AP
4.
4, 5
AP
5.
4, 5
AP
1-1