Question 1

One of the principles of the conceptual framework is the matching principle.Which of the following is not a good example of that principle?

Accepted Answer

A) A machine that produces certain goods is amortized over its useful life.The resulting amortization expense is matched with the proceeds from the sale of those goods. 
B) The entire two-year insurance premium is expensed in the first year. 
C) The write-off an uncollectible receivable in the year that the sale was made. 
D) The recognition of revenue for which associated expenses can not yet be determined is delayed until such determination can be made. 
A) A machine that produces certain goods is amortized over its useful life.The resulting amortization expense is matched with the proceeds from the sale of those goods. 
B) The entire two-year insurance premium is expensed in the first year. 
C) The write-off an uncollectible receivable in the year that the sale was made. 
D) The recognition of revenue for which associated expenses can not yet be determined is delayed until such determination can be made.

Question 2

Information that is representationally faithful is

Accepted Answer

A) Complete 
B) Neutral 
C) Free from material error or bias 
D) All of these 
A) Complete 
B) Neutral 
C) Free from material error or bias 
D) All of these

Question 3

Which of the following independent business transactions would most likely be recorded as an accounting loss?

Accepted Answer

A) A decrease in a retail store's sales 
B) A decrease of a bank's interest income 
C) A decrease in net assets from a company's incidental transactions. 
D) All of the above 
A) A decrease in a retail store's sales 
B) A decrease of a bank's interest income 
C) A decrease in net assets from a company's incidental transactions. 
D) All of the above

Question 4

A principles based approach to financial reporting standards generally does not exhibit ` the following:

Accepted Answer

A) Specific rules 
B) Flexibility 
C) General guidance 
D) Room for a large degree of professional judgement 
A) Specific rules 
B) Flexibility 
C) General guidance 
D) Room for a large degree of professional judgement

Question 5

The current mixed valuation model primarily ties the basis of valuation to

Accepted Answer

A) the level of uncertainty. 
B) measurement reliability. 
C) the age of the asset. 
D) management intent with respect to the asset. 
A) the level of uncertainty. 
B) measurement reliability. 
C) the age of the asset. 
D) management intent with respect to the asset.

Question 6

Application of the full disclosure principle

Accepted Answer

A) is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits. 
B) is violated when important financial information is buried in the notes to the financial statements. 
C) is demonstrated by the inclusion of information such as information about contingencies. 
D) requires that the financial statements be consistent and comparable. 
A) is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits. 
B) is violated when important financial information is buried in the notes to the financial statements. 
C) is demonstrated by the inclusion of information such as information about contingencies. 
D) requires that the financial statements be consistent and comparable.

Question 7

The assumption that a business enterprise will not be sold or liquidated in the near future is known as the

Accepted Answer

A) economic entity assumption. 
B) monetary unit assumption. 
C) conservatism assumption. 
D) none of these. 
A) economic entity assumption. 
B) monetary unit assumption. 
C) conservatism assumption. 
D) none of these.

Question 8

Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the

Accepted Answer

A) economic entity assumption. 
B) relevance characteristic. 
C) comparability characteristic. 
D) neutrality characteristic. 
A) economic entity assumption. 
B) relevance characteristic. 
C) comparability characteristic. 
D) neutrality characteristic.

Question 9

Which of the following is not an objective of financial reporting?

Accepted Answer

A) To provide information about an entity's economic resources, obligations and equity/net assets. 
B) To provide information that is helpful to investors and creditors and other users in making resource allocation decisions and/or assessing management stewardship. 
C) To provide information that is useful in assessing the economic performance of the entity. 
D) All of these are objectives of financial reporting. 
A) To provide information about an entity's economic resources, obligations and equity/net assets. 
B) To provide information that is helpful to investors and creditors and other users in making resource allocation decisions and/or assessing management stewardship. 
C) To provide information that is useful in assessing the economic performance of the entity. 
D) All of these are objectives of financial reporting.

Question 10

Which of the following items below does not meet the definition of an asset?

Accepted Answer

A) A building owned and used by a company 
B) Equipment that is owned and used by a company 
C) Publicly available water used by a farm to water its crops 
D) None of the above 
A) A building owned and used by a company 
B) Equipment that is owned and used by a company 
C) Publicly available water used by a farm to water its crops 
D) None of the above

Question 11

Which of the following is not a time when revenue may be recognized?

Accepted Answer

A) At time of sale 
B) At receipt of cash 
C) During production 
D) All of these are possible times of revenue recognition. 
A) At time of sale 
B) At receipt of cash 
C) During production 
D) All of these are possible times of revenue recognition.

Question 12

A severe cold snap may affect this year's crop of Florida's citrus growers.The potentially adverse affect is disclosed in the financial statements of the citrus growers.This practice can be best described as an application of

Accepted Answer

A) The derecognition of financial statement elements 
B) The full disclosure principle 
C) The going concern assumption 
D) The economic entity assumption 
A) The derecognition of financial statement elements 
B) The full disclosure principle 
C) The going concern assumption 
D) The economic entity assumption

Question 13

Generally, revenue from sales should be recognized at a point when

Accepted Answer

A) management decides it is appropriate to do so. 
B) the product is available for sale to the ultimate consumer. 
C) the entire amount receivable has been collected from the customer and there remains no further warranty liability. 
D) none of these. 
A) management decides it is appropriate to do so. 
B) the product is available for sale to the ultimate consumer. 
C) the entire amount receivable has been collected from the customer and there remains no further warranty liability. 
D) none of these.

Question 14

Revenue generally should be recognized

Accepted Answer

A) at the end of production. 
B) at the time of cash collection. 
C) when performance is achieved. 
D) when performance is achieved and the amount earned is measurable and collectible. 
A) at the end of production. 
B) at the time of cash collection. 
C) when performance is achieved. 
D) when performance is achieved and the amount earned is measurable and collectible.

One of the principles of the conceptual framework is the matching principle.Which of the following is not a good example of that principle?

Information that is representationally faithful is

Which of the following independent business transactions would most likely be recorded as an accounting loss?

A principles based approach to financial reporting standards generally does not exhibit ` the following:

The current mixed valuation model primarily ties the basis of valuation to

Application of the full disclosure principle

The assumption that a business enterprise will not be sold or liquidated in the near future is known as the

Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the

Which of the following is not an objective of financial reporting?

Which of the following items below does not meet the definition of an asset?

Which of the following is not a time when revenue may be recognized?

A severe cold snap may affect this year's crop of Florida's citrus growers.The potentially adverse affect is disclosed in the financial statements of the citrus growers.This practice can be best described as an application of

Generally, revenue from sales should be recognized at a point when

Revenue generally should be recognized

The Canadian Financial Reporting Environment

The Accounting Information System

Reporting Financial Performance

Financial Position and Cash Flows

Revenue Recognition

Cash and Receivables

Inventory

Investments

Property, Plant, and Equipment: Accounting Model Basics

Depreciation, Impairment, and Disposition

Intangible Assets and Goodwill

Filters

Exam 2: Conceptual Framework Underlying Financial Reporting

One of the principles of the conceptual framework is the matching principle.Which of the following is not a good example of that principle?

Information that is representationally faithful is

Which of the following independent business transactions would most likely be recorded as an accounting loss?

A principles based approach to financial reporting standards generally does not exhibit ` the following:

The current mixed valuation model primarily ties the basis of valuation to

Application of the full disclosure principle

The assumption that a business enterprise will not be sold or liquidated in the near future is known as the

Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the

Which of the following is not an objective of financial reporting?

Which of the following items below does not meet the definition of an asset?

Which of the following is not a time when revenue may be recognized?

A severe cold snap may affect this year's crop of Florida's citrus growers.The potentially adverse affect is disclosed in the financial statements of the citrus growers.This practice can be best described as an application of

Generally, revenue from sales should be recognized at a point when

Revenue generally should be recognized

The Canadian Financial Reporting Environment

The Accounting Information System

Reporting Financial Performance

Financial Position and Cash Flows

Revenue Recognition

Cash and Receivables

Inventory

Investments

Property, Plant, and Equipment: Accounting Model Basics

Depreciation, Impairment, and Disposition

Intangible Assets and Goodwill

Filters