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1. Melissa is examining the major financial statements of a company that she has invested in. Although the companys stock has been increasing in value, she believes they may be having issues with liquidity.

Refer to Scenario 8.1. Melissa is concerned that the company has too many immediate costs related to their core operations. Melissa is thinking about the companys ___________.

A. liabilities

B. revenues

C. assets

D. expenses

2. Allegra was hired to work for a large consulting firm right out of college, and she has only been with the company for six months. She is responsible for compiling, organizing, and analyzing accounting information for the companys stockholders. She spends most of her time meeting with various business-unit managers to discuss how they should present their numbers to the public. Allegra could best be described as a ________.

A. government accountant

B. management accountant

C. certified public accountant (CPA)

D. financial accountant

3. Merles boss is worried about stockholders reaction to their companys recent performance. He has asked Merle to add extraneous information in the financial statements to help disguise the bad numbers. Merle knows that this would be a violation of the generally accepted accounting principles (GAAP) requirement that financial statements be _________, so he has escalated the issue to the companys chief financial officer.

A. comparable

B. consistent

C. relevant

D. reliable

4. Abel is preparing his firms accounting statements for the year, and he notices that someone has changed some of the terminology. Although some terms are interchangeable, like sales and revenues, he is concerned that these changes may be a violation of the generally accepted accounting principles (GAAP) requirement that financial statements be ____________.

A. comparable

B. reliable

C. consistent

D. relevant

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