Question 1

Which of the following is $\underline{not}$ considered one of the three broad categories of accounting changes?

Accepted Answer

A) Change in Accounting Principle 
B) Change in Accounting Estimate 
C) Change in Reporting Entity 
D) Change in Accounting Application 
A) Change in Accounting Principle 
B) Change in Accounting Estimate 
C) Change in Reporting Entity 
D) Change in Accounting Application D

Question 2

Which of the following is a definition of expenses that clearly represents an asset-liability approach?

Accepted Answer

A) Expenses are outflows or other using up of assets or incurrence of liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's major or central operations. 
B) Expenses are costs directly associated with the revenue of the period. 
C) Expenses are gross decreases in assets or gross increases in liabilities recognized and measured in conformity with generally accepted accounting principles that result from those types of profit-directed activities of an enterprise. 
D) Expenses in the broadest sense include all expired costs which are deductible from revenues. 
A) Expenses are outflows or other using up of assets or incurrence of liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's major or central operations. 
B) Expenses are costs directly associated with the revenue of the period. 
C) Expenses are gross decreases in assets or gross increases in liabilities recognized and measured in conformity with generally accepted accounting principles that result from those types of profit-directed activities of an enterprise. 
D) Expenses in the broadest sense include all expired costs which are deductible from revenues. A

Question 3

Which of the following is $\underline{not}$ a component of the single income statement proposed by the G4+1 report?

Accepted Answer

A) Pro forma earnings 
B) Results of operating or trading activities 
C) Results pertaining to financing and other treasury activities 
D) Other Gains and Losses 
A) Pro forma earnings 
B) Results of operating or trading activities 
C) Results pertaining to financing and other treasury activities 
D) Other Gains and Losses A

Question 4

Currently, expense is recognized when an incentive stock option is granted.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is the primary criterion for revenue recognition applied in practice?

Accepted Answer

A) Cash collection 
B) Completion of the production process 
C) Completion of the earnings process 
D) When sales price is measurable 
A) Cash collection 
B) Completion of the production process 
C) Completion of the earnings process 
D) When sales price is measurable

Question 6

All empirical evidence supports the all-inclusive income concept.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is the date that management commits itself to a formal plan to dispose of a business segment?

Accepted Answer

A) The measurement date 
B) The disposal date 
C) The assessment date 
D) The transfer date 
A) The measurement date 
B) The disposal date 
C) The assessment date 
D) The transfer date

Question 8

A major problem with SFAS No. 114 is that it applies only to creditors, while debtors are still governed by SFAS No. 15.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is the major problem underlying future events and their impact upon event recognition?

Accepted Answer

A) Management intent 
B) The probabilistic nature of future events 
C) The perception of the past event 
D) Future economic conditions 
A) Management intent 
B) The probabilistic nature of future events 
C) The perception of the past event 
D) Future economic conditions

Question 10

A troubled debt restructuring occurs when a creditor, for economic or legal reasons related to the debtor's financial difficulties, grants a concession to the debtor that it would not otherwise consider.

Accepted Answer

A) True 
 B)False

Question 11

The expense recognition model based on historical cost, as well as the model based on current value, must allocate the costs incurred.

Accepted Answer

A) True 
 B)False

Question 12

The current operating school of thought holds that:

Accepted Answer

A) All components of comprehensive income should be in the income statement. 
B) The income statement should contain only normal operating components of comprehensive income. 
C) Retained earnings should reflect only total earnings as reported in the income statement and dividend distributions, in addition to beginning and ending balances. 
D) Unusual or infrequently occurring gains and losses should be reported on the income statement. 
A) All components of comprehensive income should be in the income statement. 
B) The income statement should contain only normal operating components of comprehensive income. 
C) Retained earnings should reflect only total earnings as reported in the income statement and dividend distributions, in addition to beginning and ending balances. 
D) Unusual or infrequently occurring gains and losses should be reported on the income statement.

Question 13

What are non-qualified stock options and incentive stock options, and how does expense recognition differ for these two types of stock options?

Accepted Answer

With a non-qualified stock option, a bar

Question 14

Research on the smoothing of year-to-year income suggests that operating income is better predicted by operating rather than all-inclusive income.

Accepted Answer

A) True 
 B)False

Question 15

The income statement is largely a legacy of 50 years of accounting standards based on the revenue-expense approach.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following methods of reporting comprehensive income did the FASB members that dissented from SFAS No. 130 believe most firms would use?

Accepted Answer

A) Reporting comprehensive income in a combined statement of financial performance 
B) Reporting comprehensive income in a separate statement of comprehensive income which would begin with net income 
C) Reporting comprehensive income within a statement of changes in equity 
D) Not reporting comprehensive income 
A) Reporting comprehensive income in a combined statement of financial performance 
B) Reporting comprehensive income in a separate statement of comprehensive income which would begin with net income 
C) Reporting comprehensive income within a statement of changes in equity 
D) Not reporting comprehensive income

Question 17

Which of the following statements applies to the two-event view of past event recognition?

Accepted Answer

A) It would recognize a transaction as occurring when an offer of early retirement is made to employees. 
B) It would be more reliant upon probabilistic estimates than the one-event view. 
C) It is faster than the one-event view. 
D) It is consistent with the asset and liability views of SFAC No. 6. 
A) It would recognize a transaction as occurring when an offer of early retirement is made to employees. 
B) It would be more reliant upon probabilistic estimates than the one-event view. 
C) It is faster than the one-event view. 
D) It is consistent with the asset and liability views of SFAC No. 6.

Question 18

The FASB appears to be continuing to take a revenue-expense approach to financial statements.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true regarding discontinued operations?

Accepted Answer

A) If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the measurement date. 
B) If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the disposal date. 
C) If a loss is expected on disposal, recognition is deferred until realization. 
D) If a gain is expected on disposal, the estimated gain is recognized in the financial statements as of the measurement date. 
A) If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the measurement date. 
B) If a loss is expected on disposal, the estimated loss is recognized in the financial statements as of the disposal date. 
C) If a loss is expected on disposal, recognition is deferred until realization. 
D) If a gain is expected on disposal, the estimated gain is recognized in the financial statements as of the measurement date.

Question 20

Which of the following methods of reporting comprehensive income is preferred by the FASB?

Accepted Answer

A) Reporting comprehensive income in a combined statement of financial performance 
B) Reporting comprehensive income in a separate statement of comprehensive income which would begin with net income 
C) Reporting comprehensive income within a statement of changes in equity 
D) Not reporting comprehensive income 
A) Reporting comprehensive income in a combined statement of financial performance 
B) Reporting comprehensive income in a separate statement of comprehensive income which would begin with net income 
C) Reporting comprehensive income within a statement of changes in equity 
D) Not reporting comprehensive income

Which of the following is $\underline{not}$ considered one of the three broad categories of accounting changes?

Which of the following is a definition of expenses that clearly represents an asset-liability approach?

Which of the following is $\underline{not}$ a component of the single income statement proposed by the G4+1 report?

Currently, expense is recognized when an incentive stock option is granted.

Which of the following is the primary criterion for revenue recognition applied in practice?

All empirical evidence supports the all-inclusive income concept.

Which of the following is the date that management commits itself to a formal plan to dispose of a business segment?

A major problem with SFAS No. 114 is that it applies only to creditors, while debtors are still governed by SFAS No. 15.

Which of the following is the major problem underlying future events and their impact upon event recognition?

A troubled debt restructuring occurs when a creditor, for economic or legal reasons related to the debtor's financial difficulties, grants a concession to the debtor that it would not otherwise consider.

The expense recognition model based on historical cost, as well as the model based on current value, must allocate the costs incurred.

The current operating school of thought holds that:

What are non-qualified stock options and incentive stock options, and how does expense recognition differ for these two types of stock options?

Research on the smoothing of year-to-year income suggests that operating income is better predicted by operating rather than all-inclusive income.

The income statement is largely a legacy of 50 years of accounting standards based on the revenue-expense approach.

Which of the following methods of reporting comprehensive income did the FASB members that dissented from SFAS No. 130 believe most firms would use?

Which of the following statements applies to the two-event view of past event recognition?

The FASB appears to be continuing to take a revenue-expense approach to financial statements.

Which of the following is true regarding discontinued operations?

Which of the following methods of reporting comprehensive income is preferred by the FASB?

An Introduction to Accounting Theory

Accounting Theory and Accounting Research

Development of Institutional Structure of Financial Accounting

The Economics of Financial Reporting Regulation

Postulates, Principles, and Concepts

The Search for Objectives

The Fasbs Conceptual Framework

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy-Making Directions

International Accounting

The Balance Sheet

Statement of Cash Flows

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Exam 12: The Income Statement

Which of the following is not‾\underline{not}not​ considered one of the three broad categories of accounting changes?

Which of the following is a definition of expenses that clearly represents an asset-liability approach?

Which of the following is not‾\underline{not}not​ a component of the single income statement proposed by the G4+1 report?

Currently, expense is recognized when an incentive stock option is granted.

Which of the following is the primary criterion for revenue recognition applied in practice?

All empirical evidence supports the all-inclusive income concept.

Which of the following is the date that management commits itself to a formal plan to dispose of a business segment?

A major problem with SFAS No. 114 is that it applies only to creditors, while debtors are still governed by SFAS No. 15.

Which of the following is the major problem underlying future events and their impact upon event recognition?

A troubled debt restructuring occurs when a creditor, for economic or legal reasons related to the debtor's financial difficulties, grants a concession to the debtor that it would not otherwise consider.

The expense recognition model based on historical cost, as well as the model based on current value, must allocate the costs incurred.

The current operating school of thought holds that:

What are non-qualified stock options and incentive stock options, and how does expense recognition differ for these two types of stock options?

Research on the smoothing of year-to-year income suggests that operating income is better predicted by operating rather than all-inclusive income.

The income statement is largely a legacy of 50 years of accounting standards based on the revenue-expense approach.

Which of the following methods of reporting comprehensive income did the FASB members that dissented from SFAS No. 130 believe most firms would use?

Which of the following statements applies to the two-event view of past event recognition?

The FASB appears to be continuing to take a revenue-expense approach to financial statements.

Which of the following is true regarding discontinued operations?

Which of the following methods of reporting comprehensive income is preferred by the FASB?

An Introduction to Accounting Theory

Accounting Theory and Accounting Research

Development of Institutional Structure of Financial Accounting

The Economics of Financial Reporting Regulation

Postulates, Principles, and Concepts

The Search for Objectives

The Fasbs Conceptual Framework

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy-Making Directions

International Accounting

The Balance Sheet

Statement of Cash Flows

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Which of the following is $\underline{not}$ considered one of the three broad categories of accounting changes?

Which of the following is $\underline{not}$ a component of the single income statement proposed by the G4+1 report?