Financial Accounting: Introductory Section Essay example

Decent Essays
Financial Accounting: Introductory Section Pretest Introduction
Welcome to the pre-assessment test for the Financial Accounting Online Course: Introductory Section. This test will allow you to assess your knowledge of basic and advanced financial accounting.
All questions must be answered for your exam to be scored.
To advance from one question to the next, select one of the answer choices or, if applicable, complete with your own choice and click the “Submit” button. After submitting your answer, you will not be able to change it, so make sure you are satisfied with your selection before you submit each answer. You may also skip a question by pressing the forward advance arrow. Please note that you can return to “skipped”
…show more content…
(4) Financial statements are used by decision makers inside and outside the business. For example, managers use them to decide whether the firm is making a profit, whether customer incentives are working, or whether to take a loan and expand the business.
If a business raises capital from outside investors, the investors will examine the company's financial statements to judge whether the funds they have invested have been used wisely.
(5) Financial reporting concepts and principles tell us when and how to measure, record and classify business transactions and aggregate them into financial reports. By following these concepts and principles, financial reporting systems provide information that is consistent over time and across different businesses, and accounting becomes a language that is widely understood.
(6) Auditors are independent parties who periodically examine a company's financial statements and the systems, internal controls and records used to produce the statements. Since a company's managers prodice their own report cards, i.e., the company's financial statements, auditors play an important role as a control mechanism. They attest that the financial statements conform to generally accepted accounting principles and they provide assurance that the company's accounts are presented fairly.
(7) Based on their analyses of financial statements,
Get Access