chap 4 - 1. Theprimaryusersofexternalfinancialreportsare: b.

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1.  The primary users of external financial reports are:  b. individuals who have an economic interest in the firm but who are not part of  management.  ________________________________________ 2.  The statement of financial position is also known as the: b. balance sheet.  _______________________________________ 3.  When owners invest money in their business, the effect on the accounting equation is that the  investment:  d. increases assets and increases owners' equity.  _______________________________________ 4.  On September 1, 2005, Blackburn Corporation prepaid rent for a one-year period, debiting a  prepaid rent account. If Blackburn fails to make an adjusting entry on December 31, 2005, the  effects will be:  a. overstatement of assets and understatement of expenses.  ________________________________________ 5.  Which of the following is true regarding an external auditor's responsibility to find fraud? c. Auditors must provide reasonable assurance that significant fraud is not present in the  financial statements. 
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_______________________________________ 6.  During an economic recession, which of the following is likely to happen to the average 
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This note was uploaded on 06/20/2011 for the course ECON 123 taught by Professor Mrews during the Spring '11 term at Korea Advanced Institute of Science and Technology.

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chap 4 - 1. Theprimaryusersofexternalfinancialreportsare: b.

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