CFAS 1 questions with correct answers

To generate general purpose financial statementw that provide information, about economic entities, that is to be used as basis for the formulation of economic decisions - correct answer Purpose of accounting in society Historical Cost - correct answer the value of the costs incurred in acquiring or creating the asset, comprising the consideration paid to acquire or crease the asset plus transaction costs Current Cost - correct answer the cost of an equivalent asset at the measurement date, comprising the consideration that would be paid at the measurement date plus the transaction costs that would be incurred at the that date. Regulatory agency - correct answer indirect user of accounting information Financial Accounting - correct answer - Recording financial transactions. - Summarizing and presenting financial information on financial reports - Analyzing the financial reports Board of directors - correct answer internal user of a company's financial information Category of users of Financial Information: Direct Users - correct answer - Users with direct interest use financial information as a tool to protect their own interest in the enterprise. - Owners, managers, creditors, suppliers, customers, employees, and taxing authority Category of users of Financial Information: Indirect Users - correct answer - Users that provide advice to or protect the interest of a direct user. - regulatory agencies, labor unions and financial and legal consultants Classification of users of Financial Information: Internal Users - correct answer users who have ready access to specific types of accounting information