Question 1

SFAC No. 5 defines disclosure as:

Accepted Answer

A) presentation of information in the financial statements. 
B) presentation of information by means other than recognition in the financial statements. 
C) recognition of information in the financial statements or footnotes. 
D) presentation of information in any source available. 
A) presentation of information in the financial statements. 
B) presentation of information by means other than recognition in the financial statements. 
C) recognition of information in the financial statements or footnotes. 
D) presentation of information in any source available. B

Question 2

Flexibility applies to which of the following situations?

Accepted Answer

A) Situations in which there are relevant circumstances and more than one possible accounting method exists. 
B) Situations in which there are relevant circumstances but only one possible accounting method exists. 
C) Situations in which there are no observable relevant circumstances and more than one possible accounting method exists. 
D) All of the above. 
A) Situations in which there are relevant circumstances and more than one possible accounting method exists. 
B) Situations in which there are relevant circumstances but only one possible accounting method exists. 
C) Situations in which there are no observable relevant circumstances and more than one possible accounting method exists. 
D) All of the above. C

Question 3

Discuss the role of management in relevant circumstances.

Accepted Answer

Managerial influence has been regarded as an important consideration in terms of allowing different accounting methods based on relevant circumstances. However, there is a problem in that the selection of accounting methods might be guided by motives such as:
(1)Maximizing short-run reported income if managerial compensation is based on it
(2)Minimizing short-run reported income if there is fear of governmental intervention on antitrust grounds
(3)Smoothing income if it is believed that stockholders perceive the firm as having a lower amount of risk than would be the case if greater fluctuations of earnings were present
Because management is potentially capable of distorting income measurements, limiting relevant circumstances to elements beyond managerial control has been suggested.

Question 4

Rigid uniformity considers relevant circumstances.

Accepted Answer

A) True 
 B)False

Question 5

Where rigid uniformity is in effect, the underlying reasons may be attributable to all but which one of the following factors?

Accepted Answer

A) A desire for conservatism 
B) An inability of the standard-setting organization to determine meaningful relevant circumstances 
C) An attempt to increase representational faithfulness of the measurement 
D) Recognition of the fact that an allocation is involved 
A) A desire for conservatism 
B) An inability of the standard-setting organization to determine meaningful relevant circumstances 
C) An attempt to increase representational faithfulness of the measurement 
D) Recognition of the fact that an allocation is involved

Question 6

The system of disclosure largely in effect today is called:

Accepted Answer

A) selective disclosure. 
B) conventional disclosure. 
C) differential disclosure. 
D) standard disclosure. 
A) selective disclosure. 
B) conventional disclosure. 
C) differential disclosure. 
D) standard disclosure.

Question 7

In accounting, we presume that if rigid uniformity can be attained, it is superior to finite uniformity.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not a true statement?

Accepted Answer

A) Comparability refers to accounting for similar transactions similarly and different circumstances differently. 
B) Comparability refers to comparing alternatives in order to make a decision. 
C) Comparability is an inherent quality of accounting numbers in the same sense that relevance and reliability are. 
D) Uniformity influences comparability. 
A) Comparability refers to accounting for similar transactions similarly and different circumstances differently. 
B) Comparability refers to comparing alternatives in order to make a decision. 
C) Comparability is an inherent quality of accounting numbers in the same sense that relevance and reliability are. 
D) Uniformity influences comparability.

Question 9

Transactions are economic or financial events that are recorded in the firm's accounts.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a true statement?

Accepted Answer

A) Disclosure is concerned with information in the financial statements as well as information in the footnotes, management's discussion and analysis, financial and operating forecasts, and other supplementary communications. 
B) Disclosure is concerned with information in the financial statements only. 
C) Disclosure is concerned with information in the footnotes only. 
D) Disclosure is concerned with information in the financial statements and all supplementary communications except financial and operating forecasts. 
A) Disclosure is concerned with information in the financial statements as well as information in the footnotes, management's discussion and analysis, financial and operating forecasts, and other supplementary communications. 
B) Disclosure is concerned with information in the financial statements only. 
C) Disclosure is concerned with information in the footnotes only. 
D) Disclosure is concerned with information in the financial statements and all supplementary communications except financial and operating forecasts.

Question 11

The 10-K report filed annually with the SEC is basically aimed toward which of the following groups?

Accepted Answer

A) Shareholders 
B) Professional financial analysts 
C) Management 
D) All of the above 
A) Shareholders 
B) Professional financial analysts 
C) Management 
D) All of the above

Question 12

Which of the following is $\underline{not}$ true of accounting allocations?

Accepted Answer

A) Examples include depreciation and cost of good sold. 
B) They are arbitrary. 
C) No method can be proved superior to another method. 
D) They are not useful in providing financial information. 
A) Examples include depreciation and cost of good sold. 
B) They are arbitrary. 
C) No method can be proved superior to another method. 
D) They are not useful in providing financial information.

Question 13

Which of the following represents the principal theoretical issue underlying quarterly data?

Accepted Answer

A) Whether an interim period should be viewed as a separate period standing on its own. 
B) Whether an interim period report should include balance sheet and cash flow statements. 
C) Whether quarterly earnings should be disaggregated by segments in terms of revenues, profit or loss, and segment assets. 
D) Whether interim reports should include income statement data and basic and fully diluted earnings per share numbers. 
A) Whether an interim period should be viewed as a separate period standing on its own. 
B) Whether an interim period report should include balance sheet and cash flow statements. 
C) Whether quarterly earnings should be disaggregated by segments in terms of revenues, profit or loss, and segment assets. 
D) Whether interim reports should include income statement data and basic and fully diluted earnings per share numbers.

Question 14

Which of the following is a true statement?

Accepted Answer

A) Finite uniformity should be more representationally faithful than rigid uniformity. 
B) Finite uniformity should be more verifiable than rigid uniformity. 
C) Rigid uniformity is more relevant than finite uniformity. 
D) Rigid uniformity can be obtained only at a greater cost that finite uniformity. 
A) Finite uniformity should be more representationally faithful than rigid uniformity. 
B) Finite uniformity should be more verifiable than rigid uniformity. 
C) Rigid uniformity is more relevant than finite uniformity. 
D) Rigid uniformity can be obtained only at a greater cost that finite uniformity.

Question 15

An event, as defined in SFAC No. 6, is "a happening of consequence to an entity."

Accepted Answer

A) True 
 B)False

Question 16

The requirement by SFAS No. 2 that research and development costs be immediately expensed is an example of:

Accepted Answer

A) elastic uniformity. 
B) finite uniformity. 
C) flexible uniformity. 
D) rigid uniformity. 
A) elastic uniformity. 
B) finite uniformity. 
C) flexible uniformity. 
D) rigid uniformity.

Question 17

Flexibility applies to situations in which there are relevant circumstances and more than one possible accounting method exists.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following describes information overload?

Accepted Answer

A) The inability of preparers to process and adequately report all the information that should be provided in financial reports. 
B) The inability of auditors to process and adequately attest to all the information that should be provided in financial reports. 
C) The inability of users to process and intelligently use all the information provided in financial reports. 
D) The inability of preparers, auditors, and users to process and adequately utilize all the information provided in financial reports. 
A) The inability of preparers to process and adequately report all the information that should be provided in financial reports. 
B) The inability of auditors to process and adequately attest to all the information that should be provided in financial reports. 
C) The inability of users to process and intelligently use all the information provided in financial reports. 
D) The inability of preparers, auditors, and users to process and adequately utilize all the information provided in financial reports.

Question 19

How has the FASB (and the SEC) addressed the contention that small firms incur significantly higher costs than large ones in carrying out complex accounting standards or disclosure requirements?

Accepted Answer

The FASB specifically considers implicat

Question 20

Whenever possible, flexibility should be used in formulating accounting policy.

Accepted Answer

A) True 
 B)False

SFAC No. 5 defines disclosure as:

Flexibility applies to which of the following situations?

Discuss the role of management in relevant circumstances.

Rigid uniformity considers relevant circumstances.

Where rigid uniformity is in effect, the underlying reasons may be attributable to all but which one of the following factors?

The system of disclosure largely in effect today is called:

In accounting, we presume that if rigid uniformity can be attained, it is superior to finite uniformity.

Which of the following is not a true statement?

Transactions are economic or financial events that are recorded in the firm's accounts.

Which of the following is a true statement?

The 10-K report filed annually with the SEC is basically aimed toward which of the following groups?

Which of the following is $\underline{not}$ true of accounting allocations?

Which of the following represents the principal theoretical issue underlying quarterly data?

Which of the following is a true statement?

An event, as defined in SFAC No. 6, is "a happening of consequence to an entity."

The requirement by SFAS No. 2 that research and development costs be immediately expensed is an example of:

Flexibility applies to situations in which there are relevant circumstances and more than one possible accounting method exists.

Which of the following describes information overload?

How has the FASB (and the SEC) addressed the contention that small firms incur significantly higher costs than large ones in carrying out complex accounting standards or disclosure requirements?

Whenever possible, flexibility should be used in formulating accounting policy.

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

International Accounting

The Balance Sheet

The Income Statement

Statement of Cash Flows

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Exam 9: Uniformity and Disclosure: Some Policy-Making Directions

SFAC No. 5 defines disclosure as:

Flexibility applies to which of the following situations?

Discuss the role of management in relevant circumstances.

Rigid uniformity considers relevant circumstances.

Where rigid uniformity is in effect, the underlying reasons may be attributable to all but which one of the following factors?

The system of disclosure largely in effect today is called:

In accounting, we presume that if rigid uniformity can be attained, it is superior to finite uniformity.

Which of the following is not a true statement?

Transactions are economic or financial events that are recorded in the firm's accounts.

Which of the following is a true statement?

The 10-K report filed annually with the SEC is basically aimed toward which of the following groups?

Which of the following is not‾\underline{not}not​ true of accounting allocations?

Which of the following represents the principal theoretical issue underlying quarterly data?

Which of the following is a true statement?

An event, as defined in SFAC No. 6, is "a happening of consequence to an entity."

The requirement by SFAS No. 2 that research and development costs be immediately expensed is an example of:

Flexibility applies to situations in which there are relevant circumstances and more than one possible accounting method exists.

Which of the following describes information overload?

How has the FASB (and the SEC) addressed the contention that small firms incur significantly higher costs than large ones in carrying out complex accounting standards or disclosure requirements?

Whenever possible, flexibility should be used in formulating accounting policy.

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

International Accounting

The Balance Sheet

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 $\underline{not}$ true of accounting allocations?