Exam 2: Conceptual Framework Underlying Financial Accounting

The characteristic that is demonstrated when a high degree of consensus can be secured among independent measurers using the same measurement methods is

Timeliness and neutrality are two ingredients of relevance.

Relevance and reliability are the two primary qualities that make accounting information useful for decision making.

Which of the following statements concerning the cost-benefit relationship is not true?

According to the FASB's conceptual framework, comprehensive income includes which of the following? Operating Income Investments by Owners a. Yes No b. Yes Yes c. No Yes d. No No

In classifying the elements of financial statements, the primary distinction between revenues and gains is

Revenue generally should be recognized

The elements of financial statements include investments by owners.These are increases in an entity's net assets resulting from owners'

A soundly developed conceptual framework of concepts and objectives should

Conservatism in accounting means the accountant should attempt to understate assets and income when possible.

A conceptual framework is a coherent system of interrelated objectives and fundamentals that can lead to consistent standards.

According to the FASB's conceptual framework, comprehensive income includes which of the following? Gross Margin Operating Income a. No Yes b. No No c. Yes No d. Yes Yes