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Unformatted text preview: Libby/Libby/Short 6e Chapter 2 Multiple-Choice Quizzes 1 The major objective of financial reporting is to provide: A) essential information to internal users of financial reports. B) useful economic information about the business to help external parties make sound financial decisions. C) information to internal users about the cash position of the business. D) information to the IRS and the Securities Exchange Commission (SEC). Answer B 2 German companies prepare their financial reports in terms of euros whereas Japanese companies report results in yen. This practice is an example of the: A) Historical cost principle B) Materiality constraint C) Full disclosure principle D) Unit-of-Measure Assumption The correct answer is D. Feedback: Under the unit-of-measure assumption, each business entity accounts for and reports its financial results in terms primarily of the national monetary unit from the discussion on page 50.results in terms primarily of the national monetary unit from the discussion on page 50....
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- Spring '07