Exam 2: Conceptual Framework Underlying Financial Accounting

Moon, Inc.applies different accounting treatments to similar events from period to period.Moon, Inc.is violating verifiability as described by the International Accounting Standards Board's (IASB's) Conceptual Framework.

A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to quickly solve new and emerging practical problems by referencing basic theory.

The second level of the International Accounting Standards Board's (IASB's) Conceptual Framework serves as a bridge between the "why" of accounting and the "how" of accounting.

Company A issuing its annual financial reports within one month of the end of the year is an example of which enhancing quality of accounting information?

Which of the following is an argument against using historical cost in accounting?

The underlying theme of the conceptual framework is

Periodicity is one of the basic assumptions of accounting used by the International Accounting Standards Board (IASB).

Revenues are realizable when assets received or held are readily convertible into cash or claims to cash.

A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to I.Issue more useful and consistent pronouncements over time. II.More quickly solve new and emerging practical problems by referencing basic theory.

Timeliness is one of the basic assumptions of accounting used by the International Accounting Standards Board (IASB).

Valuing assets at their liquidation values rather than their cost is inconsistent with the

The foundation of the International Accounting Standards Board's (IASB's) Conceptual Framework is found on the third level of the Framework and includes assumptions, principles, and constraints.

When information about two different enterprises has been prepared and presented in a similar manner, the information exhibits the characteristic of

What is meant by comparability when discussing financial accounting information?

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

What is meant by consistency when discussing financial accounting information?

The International Accounting Standards Board's (IASB) rule for materiality is any item under 5% of net income is considered immaterial.

Recognition of expense related to amortization of an intangible asset illustrates which principle of accounting?

Changing the method of inventory valuation should be reported in the financial statements under what qualitative characteristic of accounting information?

Timeliness and neutrality are two ingredients of relevance.