TRUE-FALSE 1. Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organization's operations. 2. Financial statements are the principal means through which financial information is communicated to those outside an enterprise. 3. Users of the financial information provided by a company use that information to make capital allocation decisions. 4. An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit. 5. Financial reports in the early 21st century did not provide any information about a company’s soft assets. 6. Accounting standards are now less likely to require the recording or disclosure of fair value information due to its inherent subjectivity. 7. While objectives for financial reporting exist on an informal basis, no formal objectives have been adopted. 8. One weakness of accrual accounting is that it does not provide a good indication of the enterprise's present and continuing ability to generate favorable cash flows. 9. Some generally accepted accounting principles have simply been accepted as appropriate because of their universal application rather than due to the action of an authoritative accounting rule-making body. 10. Users of financial accounting statements have both coinciding and conflicting needs for information of various types. 11. The Securities and Exchange Commission appointed the Committee on Accounting Procedure. 12. The passage of a new FASB Standards Statement requires the support of five of the seven board members.
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