Exercises

Ⅰ. Comprehension: True/False.

1. Supervision function, which is one of the basic functions of accounting, runs through the whole process of economic activities.

2. The accounting profession can be divided into three broad categories: public accounting, private accounting and accounting for government and nonprofit organizations.

3. The accrual basis of accounting recognizes revenue when realized and expenses when incurred.

4. Relevance is the extent to which information should be with verifiability, representational faithfulness, and neutrality.

5. Compared to other measurement attributes, historical cost is objective and determinable, so it is widely used in practice.

Ⅱ. Fill in the blanks with the following words and phrases in the box.

1. Accounting is an information system designed to identify, record and reflect economic activities and events about an enterprise with ______ as its main criterion.

2. The goal of accounting is to provide useful information for decision making. Information to be useful should be worthy of trust. So the effectiveness of financial reporting depends on sound.

3. The ______ refers to the objective functions that the accounting during operation and management.

4. There are two broad types of financial information users: internal users and ______.

5. The ______ means the business activities of an accounting entity will continue indefinitely, and will not disappear for bankruptcy, liquidation, dissolution in the foreseeable future.

6. ______ prescribes that a company report the details behind financial statements that would impact user's decisions.

7. The primary decision-specific qualities that make accounting information useful are relevance and, ______ both is critical.

8. ______ also called the expense recognition principle, prescribes that a company record the expenses it incurred to generate the revenue reported.

9. ______ presumes that the life of a going-concern company can be divided into periods, such as months, quarters, years, so that financial reports can be prepared separately by those periods.

10. ______ means a business entity should be accounted separately from other business entities,including its owner.

Ⅲ. Translate the following sentences into Chinese.

1. There are four major accounting assumptions, the business entity assumption, the going-concern assumption, the monetary unit assumption and the time period assumption.

2. There are five basic accounting principles that are used to record economic transactions: （1） Accrualbasis principle; （2） Historical cost principle; （3） Realization principle; （4） Matching principle; （5） Full disclosure principle.

3. According to the Accounting Standards for Business Enterprises in China，there are typically five measurement attributes, that is historical cost, current cost, current market value, net realizable value,and present value.

4. Reflecting means to provide timely and accurate information about a firm's financial condition and operating performance to its external and internal users by means of financial reports.

5. External users of accounting information are the users who are outside the enterprise，such as shareholders （investors）, creditors （lenders）, tax offices, external （independent） auditors, labor unions,and so on.