Chapter 2 Self Test

Chapter 2 Self Test - Chapter 2 Self Test (Answers are...

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Chapter 2 Self Test (Answers are below) 1. Which of the following statements about accruals and cash flows is false? A. Company value can be determined by using accrual accounting numbers. B. Accrual accounting numbers are subject to accounting distortions. C. Cash flows are more reliable than accruals. D. Cash flows cannot be manipulated. 2. The two primary qualities of accounting information to make it useful for decision making are: A. reliability and comparability. B. relevance and reliability. C. materiality and comparability. D. full disclosure and relevance 3. Financial accounting data has some inherent limitations. Which of the following are limitations? I. Not all economic events are easily quantifiable. II. Many accounting entries rely heavily on estimates. III. Historical cost can distort statements. IV. Inflation can distort accounting data. A. I, II and III B. I, III and IV C. II, III and IV D. I, II, III and IV 4. Which of the following are examples of judgments made in the accounting
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Chapter 2 Self Test - Chapter 2 Self Test (Answers are...

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