Reference no: EM132771380

Problem 1: Which of the following statements concerning accrual accounting is correct?

Select one:

Option A Expenses are recognised in the period in which the consumption of costs can be measured in a faithful, verifiable manner.
Option B Profit is the excess of cash inflows from income over cash outflows for expenses.
Option C Income from sales is recognised in the period when the cheque is cashed.
Option D For most businesses, the cash approach gives a better measure of economic performance than does the accrual approach.

Problem 2: The term 'general purpose financial statements' refers to:

Select one:

Option A financial reports prepared for a variety of external users who are unable to obtain the accounting information for their own specific needs.
Option B financial reports prepared for users who have specialised needs and have the authority to obtain the required information.
Option C financial reports useful for special purposes but not in making financial decisions.
Option D financial reports prepared to provide specific information for use by internal users only.