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VI. Tell whether each of the following statements is true or false
according to the text. Correct the false statements to make them true:

1. _______ Today, it is impossible to manage a business operation without accurate
and timely accounting information.
2. _______ Many people confuse accounting with bookkeepings.
3. _______ This information can be compiled for the entire firm; for each product;
for each sales territory, store, or individual salesperson; for each division or
department; and generally in any way that will help those who manage the
organization.
4. _______ The balance sheet must demonstrate that the accounting equation does
indeed equation.
5. _______ The information contains in these two financial statements becomes
more important when it is compared with corresponding information for previous
years, for competitors, and for the industry in which the firm operates.

VII. Choose the one word that would best keep the meaning of each
sentence:

1. Managers and employees, lenders, suppliers, stockholders, and government agencies all
rely on the information contained in two financial statements.

a) impose;
b) count on;
c) implement;
d) provide.

2. Accounting is the process of systematically collecting, analyzing, and reporting
financial information.

a) investigate;
b) transform;
c) input;
d) file.

3. The firm’s accounting system provides the information dealing with revenues, costs,
accounts receivables, amounts borrowed and owed, profits, return on investment, and the
like.

a) income;
b) expenditure;
c) procedures;
d) deposit.

4. Stockholders and potential investors need the information to evaluate soundness of
investments, and government agencies need it to confirm tax liabilities, confirm payroll
deduction, and approve new issues of stocks and bonds.

a) bond;
b) obligations;