Question 1

The second level of the International Accounting Standards Board's (IASB's) Conceptual Framework

Accepted Answer

A) provides conceptual building blocks that explain the qualitative characteristics of accounting information. 
B) defines the elements of financial statements. 
C) serves as a bridge between the "why" of accounting and the "how" of accounting. 
D) all of the choices are correct. 
A) provides conceptual building blocks that explain the qualitative characteristics of accounting information. 
B) defines the elements of financial statements. 
C) serves as a bridge between the "why" of accounting and the "how" of accounting. 
D) all of the choices are correct.

Question 2

An implicit assumption of the International Accounting Standards Board's (IASB's) Conceptual Framework is that users need to be experts in business and financial accounting matters to understand the information contained in financial statements.

Accepted Answer

A) True 
 B)False

Question 3

Under International Financial Reporting Standards (IFRS) notes to the financial statements must qualify as an element.

Accepted Answer

A) True 
 B)False

Question 4

The basic assumptions of accounting used by the International Accounting Standards Board (IASB) include all of the following except:

Accepted Answer

A) Going concern. 
B) Periodicity. 
C) Accrual basis. 
D) Materiality. 
A) Going concern. 
B) Periodicity. 
C) Accrual basis. 
D) Materiality.

Question 5

What is the general approach as to when product costs are recognized as expenses?

Accepted Answer

A) In the period when the expenses are paid. 
B) In the period when the expenses are incurred. 
C) In the period when the vendor invoice is received. 
D) In the period when the related revenue is recognized. 
A) In the period when the expenses are paid. 
B) In the period when the expenses are incurred. 
C) In the period when the vendor invoice is received. 
D) In the period when the related revenue is recognized.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics are considered either relevant or prudent.

Accepted Answer

A) True 
 B)False

Question 8

The second level in the International Accounting Standards Board's (IASB's) Conceptual Framework

Accepted Answer

A) Identifies the objective of financial reporting. 
B) Identifies recognition, measurement, and disclosure concepts used in establishing and applying accounting standards. 
C) Provides the elements of financial statements. 
D) Includes assumptions, principles, and constraints. 
A) Identifies the objective of financial reporting. 
B) Identifies recognition, measurement, and disclosure concepts used in establishing and applying accounting standards. 
C) Provides the elements of financial statements. 
D) Includes assumptions, principles, and constraints.

Question 9

The 2S1U1P1nd level of the IASB's conceptual framework provides the qualitative characteristics that make accounting information useful and the elements of financial statements.

Accepted Answer

A) True 
 B)False

Question 10

Supplementary information may include details or amounts that present a different perspective from that adopted in the financial statements.

Accepted Answer

A) True 
 B)False

Question 11

Decision usefulness is the underlying theme of the conceptual framework.

Accepted Answer

A) True 
 B)False

Question 12

The International Accounting Standards Board's (IASB) conceptual framework includes the concept of prudence or conservatism which means when in doubt, choose the solution that will be least likely to overstate assets or income and\or understate liabilities or expenses.

Accepted Answer

A) True 
 B)False

Question 13

Users of financial statements are assumed to have no knowledge of business and financial accounting matters by financial statement preparers.

Accepted Answer

A) True 
 B)False

Question 14

The cost-benefit constraint included in the International Accounting Standards Board's conceptual framework states that financial information should be free from cost to users of the information.

Accepted Answer

A) True 
 B)False

Question 15

The International Accounting Standards Board (IASB) uses a conceptual framework based on individual concepts developed by each member of the standard-setting body.

Accepted Answer

A) True 
 B)False

Question 16

What is the objective of financial reporting as indicated in the conceptual framework?

Accepted Answer

A) provide information that is useful to those making investing and credit decisions. 
B) provide information that is useful to management. 
C) provide information about those investing in the entity. 
D) All of the above. 
A) provide information that is useful to those making investing and credit decisions. 
B) provide information that is useful to management. 
C) provide information about those investing in the entity. 
D) All of the above.

Question 17

Accounting information is considered to be relevant when it

Accepted Answer

A) can be depended on to represent the economic conditions and events that it is intended to represent. 
B) is capable of making a difference in a decision. 
C) is understandable by reasonably informed users of accounting information. 
D) is verifiable and neutral. 
A) can be depended on to represent the economic conditions and events that it is intended to represent. 
B) is capable of making a difference in a decision. 
C) is understandable by reasonably informed users of accounting information. 
D) is verifiable and neutral.

Question 18

The basic principles of accounting used by the International Accounting Standards Board include all of the following except :

Accepted Answer

A) Measurement 
B) Full disclosure 
C) Revenue recognition 
D) Going concern 
A) Measurement 
B) Full disclosure 
C) Revenue recognition 
D) Going concern

Question 19

Which of the following practices may not be an acceptable deviation from recognizing revenue at the point of sale?

Accepted Answer

A) Upon receipt of cash. 
B) During production. 
C) Upon receipt of order. 
D) End of production. 
A) Upon receipt of cash. 
B) During production. 
C) Upon receipt of order. 
D) End of production.

Question 20

The Allowance for Doubtful Accounts, which appears as a deduction from Accounts Receivable on a statement of financial position and which is based on an estimate of bad debts, is an application of the

Accepted Answer

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

Exam 2: Conceptual Framework Underlying Financial Accounting

The second level of the International Accounting Standards Board's (IASB's) Conceptual Framework

An implicit assumption of the International Accounting Standards Board's (IASB's) Conceptual Framework is that users need to be experts in business and financial accounting matters to understand the information contained in financial statements.

Under International Financial Reporting Standards (IFRS) notes to the financial statements must qualify as an element.

The basic assumptions of accounting used by the International Accounting Standards Board (IASB) include all of the following except:

What is the general approach as to when product costs are recognized as expenses?

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

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics are considered either relevant or prudent.

The second level in the International Accounting Standards Board's (IASB's) Conceptual Framework

The 2nd<\sup> level of the IASB's conceptual framework provides the qualitative characteristics that make accounting information useful and the elements of financial statements.

Supplementary information may include details or amounts that present a different perspective from that adopted in the financial statements.

Decision usefulness is the underlying theme of the conceptual framework.

The International Accounting Standards Board's (IASB) conceptual framework includes the concept of prudence or conservatism which means when in doubt, choose the solution that will be least likely to overstate assets or income and\or understate liabilities or expenses.

Users of financial statements are assumed to have no knowledge of business and financial accounting matters by financial statement preparers.

The cost-benefit constraint included in the International Accounting Standards Board's conceptual framework states that financial information should be free from cost to users of the information.

The International Accounting Standards Board (IASB) uses a conceptual framework based on individual concepts developed by each member of the standard-setting body.

What is the objective of financial reporting as indicated in the conceptual framework?

Accounting information is considered to be relevant when it

The basic principles of accounting used by the International Accounting Standards Board include all of the following except :

Which of the following practices may not be an acceptable deviation from recognizing revenue at the point of sale?

The Allowance for Doubtful Accounts, which appears as a deduction from Accounts Receivable on a statement of financial position and which is based on an estimate of bad debts, is an application of the

Financial Accounting and Accounting Standards

The Accounting Information System

Income Statement and Related Information

Statement of Financial Position 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, Provisions, and Contingencies

Non-Current Liabilities

Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Presentation and Disclosure in Financial Reporting

Filters

The 2^{nd<\sup> level of the IASB's conceptual framework provides the qualitative characteristics that make accounting information useful and the elements of financial statements.}