Gen Bus 310 Test 2

5. Kinder Company had retained earnings of $650,000 at the end of the current year. For the current year, revenues were $1,200,000 and expenses totaled $975,000. No dividends were paid in the current year. What was the balance in retained earnings at the end of the prior year? A. $425,000 B. $875,000 C. $225,000 D. $650,000 E. $1,200,000 F. None of the above is the single best answer.

A. $425,000

At the beginning of the period, Gator company had assets $500,000, liabilities $225,000, and stockholders' equity $275,000. During the period, the company purchased land for $70,000 cash, bought supplies for $10,000 on account, and issued a note payable for $5,000 cash. What is the total amount of assets reported at the end of the period? A. $515,000 B. $530,000 C. $570,000 D. $575,000 E. $585,000 F. None of the above is the single best answer.

A. $515,000

Using the DuPont formula, the return on equity is equal to: A. Equity multiplier X total asset turnover X net profit margin B. Total asset turnover X net profit margin C. Return on assets X total asset turnover D. Total asset turnover X equity multiplier X gross profit margin E. Total asset turnover X equity multiplier X operating profit margin F. None of the above is the single best answer.

A. Equity multiplier X total asset turnover X net profit margin

Which of the following statements are true? I. intangible assets are noncurrent assets that do not have physical substance II. property, plant, and equipment are investments that are not used in operating the business III. current assets are listed in order of magnitude (size) IV. obligations that are expected to be paid after one year are classified as long-term liabilities A. I and IV B. II only C. II and III D. II, III, and IV E. IV only F. None of the above is the single best answer.

A. I and IV

Which of these statements about a journal is FALSE? I. it contains only revenue and expense accounts II. it provides a chronological record of transactions III. it helps to locate errors because the debit and credit amounts for each entry can be readily compared IV. it discloses in one place the complete effect of a transaction A. I only B. I, III, and IV C. II and III D. II, III, and IV E. IV only

A. I only

Which one of the following computes the amount of net earnings generated by every $1 invested in a company by common stockholders? A. Return on equity B. Return on assets C. Quick ratio D. Inventory turnover E. PE ratio F. None of the above is the single best answer.

A. Return on equity

Which of the following financial statements is reported as of a specific date rather than for a given period of time? A. balance sheet B. income statement C. statement of stockholders' equity D. retained earnings statement E. statement of cash flows F. None of the above is the single best answer.

A. balance sheet

Which quality of useful information states that accounting information must be complete and neutral? A. faithful representation B. relevance C. verifiability D. understandability E. consistency F. None of the above is the single best answer.

A. faithful representation

A company had the following transactions during the period ended December 31, 2014: Issued common stock $160,000 Issued bonds 220,000 Bought supplies on account 12,000 Purchased land to be held as an investment 300,000 The company also reported $190,000 in net income. What is the change in stockholders' equity for the period? A. increase $350,000 B. increase $300,000 C. increase $190,000 D. decrease $178,000 E. decrease $110,000 F. None of the above is the single best answer.

A. increase $350,000

Eli Corporation acquired office equipment with a five-year useful life for $5,000 by paying cash of $3,000 with the balance on account. What is the total effect of this transaction on Eli Corporation's balance sheet? A. increase assets $2,000; increase liabilities $2,000 B. increase assets $5,000, increase liabilities $5,000 C. increase revenues $5,000; increase expenses $5,000 D. increase expenses $5,000; increase assets $5,000 E. increase liabilities $2,000; increase expenses $2,000 F. None of the above is the single best answer.

A. increase assets $2,000; increase liabilities $2,000

During 2014, Rose Company assets decreased $40,000 and its liabilities decreased $70,000. Its stockholders' equity therefore: A. increased $30,000 B. increased $130,000 C. decreased $30,000 D. decreased $130,000 E. decreased $70,000 F. None of the above is the single best answer.

A. increased $30,000

A trial balance: A. is a list of accounts with their balances at a given time B. proves that proper account titles were used C. will not balance if a correct journal entry is posted twice D. proves that all transactions have been recorded E. will always balance, regardless of journal entry errors F. None of the above is the single best answer.

A. is a list of accounts with their balances at a given time

A company purchased a tract of land and has built a production plant on the land to use in operations. The land should be reported and classified under which section of the balance sheet: A. property, plant, and equipment B. land expense C. long-term investment D. intangible asset E. current asset F. None of the above is the single best answer.

A. property, plant, and equipment

Net profit margin measures return on: A. sales B. stockholders' equity C. current assets D. total assets E. inventory F. None of the above is the single best answer.

A. sales

Pacific Company had the following balances at the end of the period: Revenues $100,000 Expenses 82,000 Dividends 3,000 Cash flows from operating activities 12,000 Cash flows from investing activities (6,000) Cash flows from financing activities 4,000 Given this information what must be the Cash balance on the balance sheet? A. $18,000 B. $10,000 C. $15,000 D. $12,000 E. $100,000 F. None of the above is the single best answer.

B. $10,000

Capstone Inc. began the year with total liabilities of $40,000 and assets of $120,000. During the year the company earned $35,000 in net income and paid dividends of $15,000. What is the balance in stockholders' equity at the end of the year? A. $35,000 B. $100,000 C. $120,000 D. $140,000 E. $160,000 F. None of the above is the single best answer.

B. $100,000

Wexler Company had retained earnings of $150,000 at the end of last year. For the current year, net income was $35,000 and dividends paid was $10,000. What is the balance in retained earnings at the end of the current year? A. $25,000 B. $175,000 C. $150,000 D. $35,000 E. $140,000 F. None of the above is the single best answer.

B. $175,000

The financial statements for Morgan Company contained the following information: Accounts payable $10,000 Sales revenue 80,000 Rent expense 22,000 Accounts receivable 17,000 Salaries and wages expense 35,000 What was Morgan Company's net income for the period? A. $80,000 B. $23,000 C. $70,000 D. $48,000 E. $7,000 F. None of the above is the single best answer.

B. $23,000

If liabilities total $350,000 and stockholders' equity totals $500,000, then total assets must be: A. $150,000 B. $850,000 C. $350,000 D. $500,000 E. $650,000 F. None of the above is the single best answer.

B. $850,000

Which of the following are capital structure ratios used by analysts to evaluate a firm's ability to meet its long-term debt obligations? I. debt ratio II. fixed asset turnover III. times interest earned ratio IV. return on equity A. I only B. I and III C. II, III, and IV D. III and IV E. IV only F. None of the above is the single best answer.

B. I and III

A revenue account: I. is decreased by debits II. has a normal balance of a credit III. has a normal balance of a debit IV. is increased by credits A. I and II B. I, II, and IV C. II and IV D. III only E. III and IV F. None of the above is the single best answer.

B. I, II, and IV

Which of the following ratios usually reflect investors' opinions of the future prospects for the firm? A. quick ratio B. PE ratio C. times interest earned ratio D. fixed asset turnover E. return on equity F. None of the above is the single best answer.

B. PE ratio

In accounting, "depreciation" refers to: A. decline in fair value of a long-lived asset B. allocation of the cost of a long-lived asset to expense C. payment of cash for a long-lived asset D. wearing away of a long-lived asset E. borrowing a long-lived asset F. None of the above is the single best answer.

B. allocation of the cost of a long-lived asset to expense

Atari Company buys a $700 machine on credit. This transaction will affect the: A. income statement only B. balance sheet only C. income statement and retained earnings statement D. income statement, retained earnings statement, and balance sheet E. retained earnings statement only F. None of the above is the single best answer.

B. balance sheet only

Which of the following is LEAST likely to be classified as a current liability? A. unearned revenues B. bonds payable C. accounts payable D. sales taxes payable E. salaries and wages payable F. None of the above is the single best answer.

B. bonds payable

In a classified balance sheet, assets are usually classified in which of the following orders: A. current assets, long-term investments, PP&E, and common stock B. current assets, long-term investments, PP&E, and intangible assets C. current assets, long-term investments, tangible assets, and intangible assets D. current assets, accounts receivable, PP&E, and intangible assets E. current assets, inventory, tangible assets, and intangible assets F. None of the above is the single best answer.

B. current assets, long-term investments, PP&E, and intangible assets

Typically, which of the following would be considered to be the most indicative of a firm's short-term debt paying ability? A. times interest earned ratio B. current ratio C. accounts receivable turnover ratio D. gross profit margin E. debt ratio F. None of the above is the single best answer.

B. current ratio

The quick ratio is considered more useful than the current ratio for: A. evaluating the profitability of a business that sell inventory very quickly B. evaluating the liquidity of a business that turns inventory into cash very slowly C. evaluating long-term debt risk D. evaluating how effectively a company is utilizing its assets E. evaluating investors' expectations concerning future earnings F. None of the above is the single best answer.

B. evaluating the liquidity of a business that turns inventory into cash very slowly

The economic entity assumption states that: A. the life of the business can be divided into artificial time periods B. every economic entity can be separately identified and accounted for C. transactions that change a company's financial statements are recorded in the periods in which they occur D. the business will remain in operation for the foreseeable future E. only those things that can be expressed in money are included in the financial statements F. None of the above is the single best answer.

B. every economic entity can be separately identified and accounted for

A company had the following transactions for the period ended December 31, 2014: Issued common stock $60,000 Retired a long-term note payable 100,000 Paid dividends 25,000 Purchased a building for cash 250,000 The company also reported $450,000 in revenues and $325,000 in expenses. What is the change in stockholders' equity for the period? A. increase $125,000 B. increase $160,000 C. decrease $125,000 D. decrease $290,000 E. decrease $350,000 F. None of the above is the single best answer.

B. increase $160,000

The effects on the basic accounting equation of performing services for cash are to: A. increase assets and decrease stockholders' equity B. increase assets and increase stockholders' equity C. increase assets and increase liabilities D. increase liabilities and increase stockholders' equity E. increase liabilities and decrease assets F. None of the above is the single best answer.

B. increase assets and increase stockholders' equity

The revenue recognition principle provides that revenue is recognized when: A. cash is received B. it is earned C. expenses are incurred D. net income is earned E. assets have been purchased F. None of the above is the single best answer.

B. it is earned

The debt ratio is a measure of: A. net cash flows relating to financing activities B. long-term debt risk C. short-term solvency D. profitability E. asset utilization F. None of the above is the single best answer.

B. long-term debt risk

A company reported the following information on December 31, 2014: Accounts receivable $5,000 Land 90,000 Inventory 15,000 Net income 45,000 Accounts payable 8,000 What is the working capital for this company? A. ($3,000) B. $7,000 C. $12,000 D. $45,000 E. $102,000 F. None of the above is the single best answer.

C. $12,000

If a company has assets of $540,000, liabilities of $180,000, and retained earnings of $90,000, investments by the stockholders must be: A. $540,000 B. $360,000 C. $270,000 D. $180,000 E. $90,000 F. None of the above is the single best answer.

C. $270,000

A company reported the following information on December 31, 2014: Cash $23,000 Intangible assets 250,000 Supplies 4,000 Prepaid insurance 15,000 Accounts payable 2,000 Unearned sales revenue 10,000 What is the working capital for this company? A. $42,000 B. $40,000 C. $30,000 D. $15,000 E. $11,000 F. None of the above is the single best answer.

C. $30,000

Which group of financial ratios measures how effectively a firm is using its assets? A. Liquidity ratios B. Market structure ratios C. Asset management efficiency ratios D. Profitability ratios E. Market value ratios F. None of the above is the single best answer.

C. Asset management efficiency ratios

An unqualified opinion can be found in which section of the annual report? A. MD&A B. Financial Statements C. Auditor's Report D. Notes to the Financial Statements E. Letter from the Chairman of the Board F. None of the above is the single best answer.

C. Auditor's Report

Which section of the statements of cash flows represents the cash received from issuing bonds? A. Operating B. Investing C. Financing D. None of the above is the single best answer.

C. Financing

Which of the following are classified as financing activities in the statement of cash flows? I. Payment of dividends II. Purchase of office building III. Payment of wages to employees IV. Issuance of note payable A. I only B. I, II, and IV C. I and IV D. II and III E. III and IV F. None of the above is the single best answer.

C. I and IV

Which is NOT part of the recording process? I. analyzing transactions II. preparing a trial balance III. entering transactions in a journal IV. posting transactions A. I and II B. I and III C. II only D. III and IV E. IV only F. None of the above is the single best answer.

C. II only

Which of the following statements about an account are TRUE? I. in its simplest form, an account consists of two parts: assets and liabilities II. an account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items III. there are separate accounts for specific assets and liabilities but only one account for stockholders' equity items IV. the left side of an account is the credit or decrease side A. I, II, and III B. I, III, and IV C. II only D. III and IV E. IV only

C. II only

Which financial ratio measures the effectiveness of management in generating returns to common stockholders with its available assets? A. Gross profit margin B. Return on equity C. Operating return on assets D. Operating profit margin E. Current ratio F. None of the above is the single best answer.

C. Operating return on assets

In an analysis of the Cliff Company, the gross profit margin was unchanged, but the net profit margin declined over the same period. What could potentially explain this result? A. Cost of goods sold increased relative to sales B. Sales increased relative to expenses C. The U.S. congress increased the corporate tax rate D. Dividends decreased E. Dividends increased F. None of the above is the single best answer.

C. The U.S. congress increased the corporate tax rate

A trial balance will NOT balance if: A. a correct journal entry is posted twice B. the purchase of supplies on account is debited to Supplies and credited to Cash C. a $100 cash dividend is debited to Dividends for $1,000 and credited to Cash for $100 D. a $450 payment on account is debited to Accounts Payable for $45 and credited to Cash for $45 E. the purchase of inventory for cash is debited to Supplies and credited to Cash F. None of the above is the single best answer.

C. a $100 cash dividend is debited to Dividends for $1,000 and credited to Cash for $100

The correct order of presentation in a classified balance sheet for the following current assets is: A. accounts receivable, cash, prepaid insurance, inventory B. cash, inventory, accounts receivable, prepaid insurance C. cash, accounts receivable, inventory, prepaid insurance D. inventory, cash, accounts receivable, prepaid insurance E. cash, prepaid insurance, accounts receivable, inventory F. None of the above is the single best answer.

C. cash, accounts receivable, inventory, prepaid insurance

Stockholders' equity represents: A. claims of employees B. claims of creditors C. claims of owners D. the difference between revenues and expenses E. the difference between common stock and net income F. None of the above is the single best answer.

C. claims of owners

Debits: A. increase both assets and liabilities B. decrease both assets and liabilities C. increase assets and decrease liabilities D. decrease assets and increase liabilities E. increase both assets and stockholders' equity F. None of the above is the single best answer.

C. increase assets and decrease liabilities

If total assets for the period increased $10,000 and stockholders' equity decreased $5,000, then liabilities must have: A. increased $5,000 B. decreased $5,000 C. increased $15,000 D. decreased $15,000 E. increased $10,000 F. None of the above is the single best answer.

C. increased $15,000

If assets increased $48,000 during a given period and stockholders' equity increased $10,000 during the same period, then liabilities must have: A. increased $10,000 B. decreased $10,000 C. increased $38,000 D. decreased $38,000 E. decreased $48,000 F. None of the above is the single best answer.

C. increased $38,000

A ledger: A. contains only asset and liability accounts B. should show accounts in alphabetical order C. is a collection of the entire group of accounts maintained by a company D. provides a chronological record of transactions E. contains only stockholders' equity accounts F. None of the above is the single best answer.

C. is a collection of the entire group of accounts maintained by a company

Current liabilities are: A. equal to long-term liabilities minus stockholders' equity B. equal to current assets minus long-term liabilities C. liabilities that will have to be paid within one year D. liabilities that will have to be paid after one year E. liabilities that have already been paid for F. None of the above is the single best answer

C. liabilities that will have to be paid within one year

What accounting constraint allows a company to ignore GAAP if an item is too small to impact a decision? A. cost B. verifiability C. materiality D. going concern E. periodicity F. None of the above is the single best answer.

C. materiality

Which accounting assumption requires that only those things that can be expressed in terms of dollars be included in the financial statements? A. economic entity B. periodicity C. monetary unit D. going concern E. accrual basis F. None of the above is the single best answer.

C. monetary unit

Which of the following statements is incorrect? A. the responsibility for the preparation and integrity of financial statements rest with management B. assets on the balance sheet must equal liabilities and stockholders' equity C. revenue and expense accounts belong on the balance sheet D. net income is the link between the income statement and the statement of retained earnings E. the cash account is the link between the balance sheet and the statement of cash flows F. None of the above is the single best answer.

C. revenue and expense accounts belong on the balance sheet

Which of the following items is a liability? A. common stock B. supplies C. salaries and wages payable D. rent expense E. prepaid rent F. None of the above is the single best answer.

C. salaries and wages payable

External users of accounting information include: A. the CEO B. part-time employees C. shareholders D. the director of human resources E. the general manger F. None of the above is the single best answer.

C. shareholders

The new accountant at Lily Corporation is asked to prepare financial statements for the first quarter of 2014. Which financial statement will she not prepare? A. balance sheet B. statement of cash flows C. statement of earnings and taxation D. retained earnings statement E. income statement F. None of the above is the single best answer.

C. statement of earnings and taxation

What is the primary criterion used by the FASB by which accounting information should be judged? A. consistency B. predictive value C. usefulness for decision making D. comparability E. understandability F. None of the above is the single best answer.

C. usefulness for decision making

Seminole Inc. reported net income of $80,000 for the period. The company paid $10,000 in dividends, had $250,000 of revenue, issued stock for $30,000, and acquired equipment for $50,000. What are Seminole Inc.'s total expenses for the period? A. $120,000 B. $140,000 C. $160,000 D. $170,000 E. $220,000 F. None of the above is the single best answer.

D. $170,000

On November 10, 2013, Red Scarf Company sold 10,000 red scarves on account to a major retailer for $50,000. Cost of goods sold for this transaction was $30,000. The retailer settled the account with a cash payment on January 10, 2014. If Red Scarf Company's accounting period ends on December 31, 2013, what will the company report as net income for 2013? A. $80,000 B. $50,000 C. $30,000 D. $20,000 E. $0 F. None of the above is the single best answer.

D. $20,000

Which of the following has the authority to set accounting standards in the U.S.? A. Generally Accepted Accounting Principles B. Federal Reserve System C. Federal Deposit Insurance Corporation D. Financial Accounting Standards Board E. Private Accounting System of Regulation F. None of the above is the single best answer.

D. Financial Accounting Standards Board

Which accounts normally have debit balances? A. assets, expenses, and revenues B. assets, expenses, and retained earnings C. assets, liabilities, and dividends D. assets, dividends, and expenses E. assets, dividends, and stockholders' equity F. None of the above is the single best answer.

D. assets, dividends, and expenses

Sales for the "base year" equals 100.0 percent. You must be looking at a: A. common size balance sheet B. pro forma balance sheet C. classified balance sheet D. common size income statement E. pro forma income statement F. None of the above is the single best answer.

D. common size income statement

Paying an account payable with cash affects the components of the accounting equation in the following way: A. decreases stockholders' equity and decreases liabilities B. increases assets and decreases liabilities C. decreases assets and increases stockholders' equity D. decreases assets and decreases liabilities E. increases assets and increases liabilities F. None of the above is the single best answer.

D. decreases assets and decreases liabilities

Cost of goods sold would be classified as what type of account? A. current asset B. current liability C. revenue D. expense E. accounts payable F. None of the above is the single best answer.

D. expense

Which accounting principle prevents companies from reporting most assets at their current market value? A. full disclosure B. revenue recognition C. expense recognition D. historical cost E. fair value F. None of the above is the single best answer.

D. historical cost

During the year, Temple Corporation issued bonds for $35,000, issued stock for $20,000, generated revenues of $120,000, incurred expenses of $90,000, and paid $10,000 in dividends. What is the effect on the stockholders' equity section of the balance sheet? A. increase $20,000 B. increase $140,000 C. decrease $35,000 D. increase $40,000 E. decrease $20,000 F. None of the above is the single best answer.

D. increase $40,000

On a classified balance sheet, patents are classified as: A. current assets B. long-term investments C. property, plant, and equipment D. intangible assets E. stockholders' equity F. None of the above is the single best answer.

D. intangible assets

The current assets section of the balance sheet should include: A. long-term investments B. unearned revenue C. property, plant, and equipment D. inventory E. intangible assets F. None of the above is the single best answer

D. inventory

Which of the following would be accounted for as an expense? A. payment of an outstanding notes payable B. purchasing land C. payment of an accounts payable D. payment of the current period's rent E. retirement of a long-term bonds payable F. None of the above is the single best answer.

D. payment of the current period's rent

A company issued its financial statements to shareholders two years after the period in which the statements provide relevant information for. What quality of useful information has this company violated? A. comparability B. consistency C. verifiability D. timeliness E. understandability F. None of the above is the single best answer.

D. timeliness

Posting: A. normally occurs before journalizing B. transfers ledger transaction data to the journal C. is an optional step in the recording process D. transfers journal entries to ledger accounts E. normally occurs after preparing the trial balance F. None of the above is the single best answer.

D. transfers journal entries to ledger accounts

Union Corporation had the following account balances at the end of the period for December 31, 2014: Notes payable $10,000 Common stock 80,000 Retained earnings, 12/31/14 50,000 Accounts payable 2,000 Retained earnings, 12/31/13 30,000 Given this information, what must be the balance in the Assets account? A. $130,000 B. $118,000 C. $20,000 D. $35,000 E. $142,000 F. None of the above is the single best answer.

E. $142,000

. A company reported the following information on December 31, 2014: Current assets $65,000 Long-term investments 110,000 Current liabilities 40,000 Long-term liabilities 80,000 Retained earnings 55,000 What is the working capital for this company? A. $175,000 B. $65,000 C. $55,000 D. $30,000 E. $25,000 F. None of the above is the single best answer.

E. $25,000

Which of the following accounts is included on the balance sheet? A. Sales revenue B. Service revenue C. Rent expense D. Dividends E. Accounts payable F. None of the above is the single best answer.

E. Accounts payable

The primary business activities include: I. Investing II. Marketing III. Purchasing IV. Operating A. I only B. I, II, and III C. II and IV D. II and III E. I and IV F. None of the above is the single best answer.

E. I and IV

Which of the following measures a company's ability to meet its short-term obligations? A. Price-earnings ratio B. Inventory turnover C. Times interest earned ratio D. Total asset turnover E. Quick ratio F. None of the above is the single best answer.

E. Quick ratio

Which of the following assets is considered to be the most liquid? A. land B. equipment C. supplies D. inventory E. accounts receivable F. None of the above is the single best answer.

E. accounts receivable

Which of the following events is NOT recorded in the accounting records? A. equipment is purchased on account B. a cash investment is made into the business C. company pays dividend to shareholders D. supplies are purchased with cash E. an employee is terminated F. None of the above is the single best answer.

E. an employee is terminated

Which of the following will increase Liabilities on the balance sheet? A. issuing stock B. incurring a net loss C. purchasing equipment for cash D. paying dividends E. buying supplies on account F. None of the above is the single best answer.

E. buying supplies on account

Within the statement of cash flows, which of the following would appear in the operating activities section? A. dividends paid to stockholders B. cash paid to purchase a new building C. cash received from issuing a note payable D. cash received from issuing common stock E. cash received from sales to customers F. None of the above is the single best answer.

E. cash received from sales to customers

The ending balance in retained earnings is NOT affected by: A. net income B. net loss C. dividends D. the beginning balance in retained earnings E. issuance of common stock F. None of the above is the single best answer.

E. issuance of common stock

The matching principle is: A. debits = credits B. assets = liabilities + stockholders' equity C. current assets - current liabilities D. having the same number of asset accounts on the balance sheet as the prior year E. recording all expenses incurred in generating the revenues of the period F. None of the above is the single best answer.

E. recording all expenses incurred in generating the revenues of the period

Net Income results when: A. assets exceed liabilities B. cash flows from operating activities exceed cash flows from financing activities C. stockholders' equity exceeds liabilities D. revenues exceed expenses E. revenues exceed liabilities F. None of the above is the single best answer.

E. revenues exceed liabilities

Changes in stockholders' equity for a given period can be found in which of the following financial statements? A. income statement B. retained earnings statement C. balance sheet D. statement of cash flows E. statement of stockholders' equity F. None of the above is the single best answer.

E. statement of stockholders' equity

Cardinal Corporation issued a long-term bond for $350,000. It used the cash proceeds to purchase a building to use in operations. What is the impact on stockholders' equity for these transactions? A. increase $350,000 B. decrease $350,000 C. increase $700,000 D. decrease $700,000 E. the transactions will not impact stockholders' equity F. None of the above is single best answer.

E. the transactions will not impact stockholders' equity

The primary objective of financial accounting is: A. to monitor and control company activities B. to provide the Board of Directors with information regarding the decisions of management C. to provide the IRS the tax returns of a company D. to issue a company's annual report to the SEC E. to provide financial statements to help external users analyze an organization's activities F. None of the above is the single best answer.

E. to provide financial statements to help external users analyze an organization's activities