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Unformatted text preview: (1) What is the purpose of the accounting system? A. To keep an archive of all information related to the business. B. To evaluate, measure and communicate all forms of business risk. C. To identify, evaluate and manage all systems and processes that are necessary to run a business. D. To identify, measure and communicate the economic events and transactions of an organisation to interested parties. E. To identify, measure and communicate the cash transactions of an organisation to interested parties. (2) The term ‘general-purpose financial reports’ refers to the fact that the information conveyed by financial statements is: A. Generally reliable but not the best available. B. Useful for general reading but not for making specific decisions. C. Generally averaged over the group of companies that is controlled by the entity. D. Potentially useful to a general group of users. E. Generally understood by those with a background in economics (3) Which financial information is of most interest to an existing creditor to the firm? A. Available cash. B. Profitability for the period. C. Total value of assets. D. Retained earnings. E. General reserve. (4) Whistleblowing is the act of: A. Exposing the company to the public by a current employee as an entity that cares only about profits. B. Exposing proprietary information to the public by one or more employees. C. Exposing an entity’s unethical practices by a current employee....
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This note was uploaded on 09/06/2011 for the course ECON 1001 at University of Sydney.