Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an element of financial statements identified under IFRS?

Accepted Answer

A)  Investment by owners 
B)  Losses 
C)  Comprehensive income 
D)  Equity 
A)  Investment by owners 
B)  Losses 
C)  Comprehensive income 
D)  Equity

Question 3

Under IFRS, a decrease in economic benefit that results in a decrease in equity is termed as a(an):

Accepted Answer

A)  Loss of economic benefit 
B)  Comprehensive loss 
C)  Expense 
D)  Distributions to owners 
A)  Loss of economic benefit 
B)  Comprehensive loss 
C)  Expense 
D)  Distributions to owners

Question 4

Generally accepted accounting principles

Accepted Answer

A)  are fundamental truths or axioms that can be derived from laws of nature. 
B)  derive their authority from legal court proceedings. 
C)  derive their credibility and authority from general recognition and acceptance by the accounting profession. 
D)  have been specified in detail in the FASB conceptual framework. 
A)  are fundamental truths or axioms that can be derived from laws of nature. 
B)  derive their authority from legal court proceedings. 
C)  derive their credibility and authority from general recognition and acceptance by the accounting profession. 
D)  have been specified in detail in the FASB conceptual framework.

Question 5

Accounting concepts-identification.
State the accounting assumption, principle, information characteristic, or constraint that is most applicable in the following cases.
1. All payments less than $25 are expensed as incurred. (Do not use conservatism.)
2. The company employs the same inventory valuation method from period to period.
3. A patent is capitalized and amortized over the periods benefited.
4. Assuming that dollars today will buy as much as ten years ago.
5. Rent paid in advance is recorded as prepaid rent.
6. Financial statements are prepared each year.
7. All significant post-balance sheet events are reported.
8. Personal transactions of the proprietor are distinguished from business transactions.

Accepted Answer

1. Materiality characteristic.
2. Consis

Question 6

The historical cost principle would be of limited usefulness if not for the going concern assumption.

Accepted Answer

A) True 
 B)False

Question 7

The economic entity assumption means that economic activity can be identified with a particular legal entity.

Accepted Answer

A) True 
 B)False

Question 8

Revenue is recognized in the accounting period in which the performance obligation is satisfied. This statement describes the

Accepted Answer

A)  consistency characteristic. 
B)  expense recognition principle. 
C)  revenue recognition principle. 
D)  relevance characteristic. 
A)  consistency characteristic. 
B)  expense recognition principle. 
C)  revenue recognition principle. 
D)  relevance characteristic.

Question 9

What is the quality of information that is capable of making a difference in a decision?

Accepted Answer

A)  Faithful representation. 
B)  Materiality. 
C)  Timeliness. 
D)  Relevance. 
A)  Faithful representation. 
B)  Materiality. 
C)  Timeliness. 
D)  Relevance.

Question 10

The measurement principle includes the

Accepted Answer

A)  fair value principle only. 
B)  historical cost principle only. 
C)  revenue recognition principle and expense recognition principle. 
D)  historical cost principle and the fair value principle. 
A)  fair value principle only. 
B)  historical cost principle only. 
C)  revenue recognition principle and expense recognition principle. 
D)  historical cost principle and the fair value principle.

Question 11

According to the FASB's conceptual framework, which of the following relates to both relevance and faithful representation?

Accepted Answer

The answer of According to the FASB's conceptual framework, which...

Question 12

Which of the following basic elements of financial statements is more associated with the balance sheet than the income statement?

Accepted Answer

A)  Equity. 
B)  Revenue. 
C)  Gains. 
D)  Expenses. 
A)  Equity. 
B)  Revenue. 
C)  Gains. 
D)  Expenses.

Question 13

The quality of information that means the numbers and descriptions match what really existed or happened is

Accepted Answer

A)  relevance. 
B)  faithful representation. 
C)  completeness. 
D)  neutrality. 
A)  relevance. 
B)  faithful representation. 
C)  completeness. 
D)  neutrality.

Question 14

Phase D of convergence project addresses the _______.

Accepted Answer

A)  elements and recognition 
B)  reporting entity 
C)  monetary unit assumption 
D)  periodicity assumption 
A)  elements and recognition 
B)  reporting entity 
C)  monetary unit assumption 
D)  periodicity assumption

Question 15

Which of the following is an implication of the going concern assumption?

Accepted Answer

A)  The historical cost principle is credible. 
B)  Depreciation and amortization policies are justifiable and appropriate. 
C)  The current-noncurrent classification of assets and liabilities is justifiable and significant. 
D)  All of these. 
A)  The historical cost principle is credible. 
B)  Depreciation and amortization policies are justifiable and appropriate. 
C)  The current-noncurrent classification of assets and liabilities is justifiable and significant. 
D)  All of these.

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

Which of the following is an element of financial statements identified under IFRS?

Under IFRS, a decrease in economic benefit that results in a decrease in equity is termed as a(an):

Generally accepted accounting principles

The historical cost principle would be of limited usefulness if not for the going concern assumption.

The economic entity assumption means that economic activity can be identified with a particular legal entity.

Revenue is recognized in the accounting period in which the performance obligation is satisfied. This statement describes the

What is the quality of information that is capable of making a difference in a decision?

The measurement principle includes the

According to the FASB's conceptual framework, which of the following relates to both relevance and faithful representation?

Which of the following basic elements of financial statements is more associated with the balance sheet than the income statement?

The quality of information that means the numbers and descriptions match what really existed or happened is

Phase D of convergence project addresses the _______.

Which of the following is an implication of the going concern assumption?

Financial Accounting and Accounting Standards

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

Filters

Exam 2: Conceptual Framework for Financial Reporting

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

Which of the following is an element of financial statements identified under IFRS?

Under IFRS, a decrease in economic benefit that results in a decrease in equity is termed as a(an):

Generally accepted accounting principles

The historical cost principle would be of limited usefulness if not for the going concern assumption.

The economic entity assumption means that economic activity can be identified with a particular legal entity.

Revenue is recognized in the accounting period in which the performance obligation is satisfied. This statement describes the

What is the quality of information that is capable of making a difference in a decision?

The measurement principle includes the

According to the FASB's conceptual framework, which of the following relates to both relevance and faithful representation?

Which of the following basic elements of financial statements is more associated with the balance sheet than the income statement?

The quality of information that means the numbers and descriptions match what really existed or happened is

Phase D of convergence project addresses the _______.

Which of the following is an implication of the going concern assumption?

Financial Accounting and Accounting Standards

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

Filters