Question 1

Which of the following statements is not true regarding the three major definitions of accounting liabilities that have evolved over time?

Accepted Answer

A) Two of the three definitions imply a proprietary view of the firm. 
B) The first definition made no distinction between owner's equity and liabilities. 
C) Not all definitions have included deferred credits as liabilities. 
D) In all three definitions, liabilities include only credit balances that involve a debtor and creditor relation. 
A) Two of the three definitions imply a proprietary view of the firm. 
B) The first definition made no distinction between owner's equity and liabilities. 
C) Not all definitions have included deferred credits as liabilities. 
D) In all three definitions, liabilities include only credit balances that involve a debtor and creditor relation. D

Question 2

In SFAS No. 153, when exchanged assets have significantly different cash flows, the new asset is recorded at book value of the traded in asset.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following is a true statement?

Accepted Answer

A) Under the articulated concept, accounting elements are defined using the revenue-expense approach rather than the asset-liability approach. 
B) The articulated approach severs the mathematical relationships between the balance sheet and income statement. 
C) Under the articulated approach, contributed capital, retained earnings, and unrealized capital adjustments are subclassifications of owners' equity. 
D) Recent SFASs have advocated the non-articulated approach to financial statements. 
A) Under the articulated concept, accounting elements are defined using the revenue-expense approach rather than the asset-liability approach. 
B) The articulated approach severs the mathematical relationships between the balance sheet and income statement. 
C) Under the articulated approach, contributed capital, retained earnings, and unrealized capital adjustments are subclassifications of owners' equity. 
D) Recent SFASs have advocated the non-articulated approach to financial statements. C

Question 4

The "future service potential" of an asset may be realized as a direct market exchange for another asset, or through conversion in a manufacturing operation for finished goods.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a true statement?

Accepted Answer

A) Asset-liability advocates are not prepared to tolerate a fluctuating income statement that may include unrealized holding gains and losses. 
B) Asset-liability advocates and revenue-expense advocates are polarized in part because the financial statements are non-articulated. 
C) Revenue-expense proponents are prepared to introduce deferred charges and deferred credits in order to smooth income measurement. 
D) With articulation, it is possible to have a revenue-expense-based income statement and an asset-liability-based balance sheet. 
A) Asset-liability advocates are not prepared to tolerate a fluctuating income statement that may include unrealized holding gains and losses. 
B) Asset-liability advocates and revenue-expense advocates are polarized in part because the financial statements are non-articulated. 
C) Revenue-expense proponents are prepared to introduce deferred charges and deferred credits in order to smooth income measurement. 
D) With articulation, it is possible to have a revenue-expense-based income statement and an asset-liability-based balance sheet.

Question 6

Which one of the following measurement bases applies to receivables?

Accepted Answer

A) Historical cost 
B) An approximation of net realizable value 
C) Selling price through factoring 
D) Discounted present value 
A) Historical cost 
B) An approximation of net realizable value 
C) Selling price through factoring 
D) Discounted present value

Question 7

After non-current liabilities have been initially measured, they are recorded on subsequent balance sheets at:

Accepted Answer

A) face value. 
B) present value based on current interest rates. 
C) present value plus stated interest. 
D) book value. 
A) face value. 
B) present value based on current interest rates. 
C) present value plus stated interest. 
D) book value.

Question 8

U.S. Corporations are not permitted to trade in their own securities.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true regarding SFAS No. 144?

Accepted Answer

A) SFAS No. 144 changed the basic measurement rules of SFAS No. 121. 
B) SFAS No. 144 converted goodwill into a non-amortizable asset. 
C) Under SFAS No. 144, when several assets constitute a productive unit but the assets have different lives, a discounted cash flow analysis is performed. 
D) SFAS 144 supersedes Opinion No. 30 in terms of the valuation of assets in discontinued segments. 
A) SFAS No. 144 changed the basic measurement rules of SFAS No. 121. 
B) SFAS No. 144 converted goodwill into a non-amortizable asset. 
C) Under SFAS No. 144, when several assets constitute a productive unit but the assets have different lives, a discounted cash flow analysis is performed. 
D) SFAS 144 supersedes Opinion No. 30 in terms of the valuation of assets in discontinued segments.

Question 10

One consequence of the revenue-expense approach is to burden the balance sheet with by-products of income measurement rules.

Accepted Answer

A) True 
 B)False

Question 11

Under the revenue-expense approach, the income statement is regarded as simply a way of classifying and reporting on changes that occur in a firm's net assets.

Accepted Answer

A) True 
 B)False

Question 12

The asset-liability approach complements the expense-liability approach because the former is applicable to the balance sheet and the latter is applicable to the income statement.

Accepted Answer

A) True 
 B)False

Question 13

What are the three distinct types of assets that appear in the balance sheets, and what degree of certainty and measurement reliability does each represent?

Accepted Answer

The three types of assets that appear in

Question 14

Which of the following is $\underline{not}$ a formal definition of assets that has been used by the accounting profession in the US?

Accepted Answer

A) Something represented by a debit balance that is or would be properly carried forward upon a closing of books of account according to the rules or principles of accounting, on the basis that it represents either a property right or value acquired, or an expenditure made which has created a property or is properly applicable to the future. 
B) Economic resources of an enterprise that are recognized and measured in conformity with generally accepted accounting principles as well as certain deferred charges that are not resources but that are recognized and measured in conformity with generally accepted accounting principles. 
C) Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. 
D) Only those economic resources that can be severed from the firm and sold. 
A) Something represented by a debit balance that is or would be properly carried forward upon a closing of books of account according to the rules or principles of accounting, on the basis that it represents either a property right or value acquired, or an expenditure made which has created a property or is properly applicable to the future. 
B) Economic resources of an enterprise that are recognized and measured in conformity with generally accepted accounting principles as well as certain deferred charges that are not resources but that are recognized and measured in conformity with generally accepted accounting principles. 
C) Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. 
D) Only those economic resources that can be severed from the firm and sold.

Question 15

In SFAS No. 121, both the recognition and measurement criteria for the impairment of asset event is based on the excess of the carrying value of the asset over its fair market value less costs of disposal.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following types of liabilities represents a duty not contractually present but which may nevertheless exist due to ethical principles of fairness?

Accepted Answer

A) Deferred credits 
B) Constructive obligations 
C) Equitable obligations 
D) Contingent liabilities 
A) Deferred credits 
B) Constructive obligations 
C) Equitable obligations 
D) Contingent liabilities

Question 17

Which of the following is a true statement?

Accepted Answer

A) There is more variety in liability groups than in asset groups. 
B) Most liabilities are non-contractual in nature. 
C) There are natural subclassifications of liabilities and assets that can be inferred from the balance sheet. 
D) Liabilities are measured at amounts established in the transaction, usually amounts to be paid in the future, sometimes discounted. 
A) There is more variety in liability groups than in asset groups. 
B) Most liabilities are non-contractual in nature. 
C) There are natural subclassifications of liabilities and assets that can be inferred from the balance sheet. 
D) Liabilities are measured at amounts established in the transaction, usually amounts to be paid in the future, sometimes discounted.

Question 18

With the articulated approach to financial statements, each statement is defined and measured independently of the other.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not true regarding the revenue-expense approach to defining accounting elements?

Accepted Answer

A) The revenue-expense approach defines assets and liabilities as a by-product of revenues and expenses. 
B) Under the revenue-expense approach, the balance sheet is burdened with by-products of income measurement rules. 
C) Deferred charges and deferred credits are ambiguous debits and credits that appear on the balance sheet under the revenue-expense approach. 
D) There are very few examples of the use of the revenue-expense approach in recent accounting standards. 
A) The revenue-expense approach defines assets and liabilities as a by-product of revenues and expenses. 
B) Under the revenue-expense approach, the balance sheet is burdened with by-products of income measurement rules. 
C) Deferred charges and deferred credits are ambiguous debits and credits that appear on the balance sheet under the revenue-expense approach. 
D) There are very few examples of the use of the revenue-expense approach in recent accounting standards.

Question 20

SFAS requires that abnormal amounts of idle facility costs, freight, handling, and spoilage be treated as current period costs.

Accepted Answer

A) True 
 B)False

Which of the following statements is not true regarding the three major definitions of accounting liabilities that have evolved over time?

In SFAS No. 153, when exchanged assets have significantly different cash flows, the new asset is recorded at book value of the traded in asset.

Which of the following is a true statement?

The "future service potential" of an asset may be realized as a direct market exchange for another asset, or through conversion in a manufacturing operation for finished goods.

Which of the following is a true statement?

Which one of the following measurement bases applies to receivables?

After non-current liabilities have been initially measured, they are recorded on subsequent balance sheets at:

U.S. Corporations are not permitted to trade in their own securities.

Which of the following is true regarding SFAS No. 144?

One consequence of the revenue-expense approach is to burden the balance sheet with by-products of income measurement rules.

Under the revenue-expense approach, the income statement is regarded as simply a way of classifying and reporting on changes that occur in a firm's net assets.

The asset-liability approach complements the expense-liability approach because the former is applicable to the balance sheet and the latter is applicable to the income statement.

What are the three distinct types of assets that appear in the balance sheets, and what degree of certainty and measurement reliability does each represent?

Which of the following is $\underline{not}$ a formal definition of assets that has been used by the accounting profession in the US?

In SFAS No. 121, both the recognition and measurement criteria for the impairment of asset event is based on the excess of the carrying value of the asset over its fair market value less costs of disposal.

Which one of the following types of liabilities represents a duty not contractually present but which may nevertheless exist due to ethical principles of fairness?

Which of the following is a true statement?

With the articulated approach to financial statements, each statement is defined and measured independently of the other.

Which of the following is not true regarding the revenue-expense approach to defining accounting elements?

SFAS requires that abnormal amounts of idle facility costs, freight, handling, and spoilage be treated as current period costs.

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 Income Statement

Statement of Cash Flows

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Exam 11: The Balance Sheet

Which of the following statements is not true regarding the three major definitions of accounting liabilities that have evolved over time?

In SFAS No. 153, when exchanged assets have significantly different cash flows, the new asset is recorded at book value of the traded in asset.

Which of the following is a true statement?

The "future service potential" of an asset may be realized as a direct market exchange for another asset, or through conversion in a manufacturing operation for finished goods.

Which of the following is a true statement?

Which one of the following measurement bases applies to receivables?

After non-current liabilities have been initially measured, they are recorded on subsequent balance sheets at:

U.S. Corporations are not permitted to trade in their own securities.

Which of the following is true regarding SFAS No. 144?

One consequence of the revenue-expense approach is to burden the balance sheet with by-products of income measurement rules.

Under the revenue-expense approach, the income statement is regarded as simply a way of classifying and reporting on changes that occur in a firm's net assets.

The asset-liability approach complements the expense-liability approach because the former is applicable to the balance sheet and the latter is applicable to the income statement.

What are the three distinct types of assets that appear in the balance sheets, and what degree of certainty and measurement reliability does each represent?

Which of the following is not‾\underline{not}not​ a formal definition of assets that has been used by the accounting profession in the US?

In SFAS No. 121, both the recognition and measurement criteria for the impairment of asset event is based on the excess of the carrying value of the asset over its fair market value less costs of disposal.

Which one of the following types of liabilities represents a duty not contractually present but which may nevertheless exist due to ethical principles of fairness?

Which of the following is a true statement?

With the articulated approach to financial statements, each statement is defined and measured independently of the other.

Which of the following is not true regarding the revenue-expense approach to defining accounting elements?

SFAS requires that abnormal amounts of idle facility costs, freight, handling, and spoilage be treated as current period costs.

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 Income Statement

Statement of Cash Flows

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Which of the following is $\underline{not}$ a formal definition of assets that has been used by the accounting profession in the US?