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Questions and Answers
What is the primary purpose of financial accounting?
What is the primary purpose of financial accounting?
- To forecast future market trends
- To calculate employee salaries and benefits
- To manage internal operations of a company
- To provide information about the financial performance and position of a company to external parties (correct)
Which accounting principle states that assets should be recorded at their original cost?
Which accounting principle states that assets should be recorded at their original cost?
- Conservatism principle
- Cost principle (correct)
- Revenue recognition principle
- Matching principle
What is the purpose of the income statement in financial accounting?
What is the purpose of the income statement in financial accounting?
- To report the company's financial performance over a specific period of time (correct)
- To provide an overview of the company's shareholders
- To disclose all the company's business transactions
- To list all the company's assets and liabilities
