Question 1

SFAC No. 1 maintains that financial statements should be geared toward specific needs of particular user groups.

Accepted Answer

A) True 
 B)False  False

Question 2

The jurisprudential view of the FASB is concerned with the theory embodied in the conceptual framework.

Accepted Answer

A) True 
 B)False  False

Question 3

SFAC designated which of the following as the term to indicate the comprehensive or total change in net assets occurring during the period as a result of operations?

Accepted Answer

A) Income 
B) Earnings 
C) Revenue 
D) Profits 
A) Income 
B) Earnings 
C) Revenue 
D) Profits A

Question 4

SFAC No. 1 takes the position that users of financial statements must be assumed to be knowledgeable about financial information and reporting.

Accepted Answer

A) True 
 B)False

Question 5

The quality of understandability is a characteristic influenced by both users and preparers of accounting information.

Accepted Answer

A) True 
 B)False

Question 6

With regard to users, SFAC No. 1 established that financial statements should be aimed at a common core of similar information users.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not part of the conceptual framework?

Accepted Answer

A) Conservatism 
B) Economic consequences 
C) Consistency 
D) None of the above are in the conceptual framework 
A) Conservatism 
B) Economic consequences 
C) Consistency 
D) None of the above are in the conceptual framework

Question 8

Under SFAC No. 8, which of the following are aspects of relevance?

Accepted Answer

A) Comparability and understandability 
B) Timeliness and comparability 
C) Representational faithfulness and decision usefulness 
D) Predictive value and confirmatory value 
A) Comparability and understandability 
B) Timeliness and comparability 
C) Representational faithfulness and decision usefulness 
D) Predictive value and confirmatory value

Question 9

Which of the following is a true statement?

Accepted Answer

A) The eight SFACs that comprise the conceptual framework were not evolutionary because they were derived from previous documents such as the Trueblood Report and ASOBAT. 
B) The definitions of SFAC No. 6 were basically a restatement of the definitions of APB Statement 4. 
C) The Achilles' heel of the document is SFAC No. 5, which reaffirmed historical cost as the basic measurement system. 
D) The key document in the series of SFACs that comprise the conceptual framework is SFAC No. 1. 
A) The eight SFACs that comprise the conceptual framework were not evolutionary because they were derived from previous documents such as the Trueblood Report and ASOBAT. 
B) The definitions of SFAC No. 6 were basically a restatement of the definitions of APB Statement 4. 
C) The Achilles' heel of the document is SFAC No. 5, which reaffirmed historical cost as the basic measurement system. 
D) The key document in the series of SFACs that comprise the conceptual framework is SFAC No. 1.

Question 10

"Economic consequences" is not part of the conceptual framework.

Accepted Answer

A) True 
 B)False

Question 11

Explain the hierarchy of accounting qualities identified in SFAC No. 2.

Accepted Answer

Decision-makers are at the top of the hi

Question 12

Which of the following is not a true statement?

Accepted Answer

A) SFAC No. 3 defines 10 elements of financial statements. 
B) SFAC No. 3 is a resolution of the definitions presented in the discussion memorandum for the conceptual framework project. 
C) SFAC No. 3 was amended by SFAC No. 6. 
D) SFAC No. 3 discusses in detail the three views of financial accounting mentioned in the discussion memorandum. 
A) SFAC No. 3 defines 10 elements of financial statements. 
B) SFAC No. 3 is a resolution of the definitions presented in the discussion memorandum for the conceptual framework project. 
C) SFAC No. 3 was amended by SFAC No. 6. 
D) SFAC No. 3 discusses in detail the three views of financial accounting mentioned in the discussion memorandum.

Question 13

SFAC No. 5 appears to deny one of the main tenets of the efficient markets hypothesis.

Accepted Answer

A) True 
 B)False

Question 14

Define the elements of financial statements identified in SFAC No. 3 and SFAC No. 6.

Accepted Answer

Assets are probable future economic bene

Question 15

Comprehensive income as defined by SFAC No. 6 includes all changes in equity during a period.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not true regarding the discussion memorandum that preceded the conceptual framework?

Accepted Answer

A) It represented the end product of the FASB's deliberations related to the conceptual framework project. 
B) The most important new issue brought up in the document was capital maintenance. 
C) It brought up three views of financial accounting and financial statements. 
D) It presented various definitions for basic accounting terms. 
A) It represented the end product of the FASB's deliberations related to the conceptual framework project. 
B) The most important new issue brought up in the document was capital maintenance. 
C) It brought up three views of financial accounting and financial statements. 
D) It presented various definitions for basic accounting terms.

Question 17

Which component of the conceptual framework is perhaps the most difficult to apply in practice?

Accepted Answer

A) Confirmatory value 
B) Understandability 
C) Benefits greater than costs 
D) Faithful representation 
A) Confirmatory value 
B) Understandability 
C) Benefits greater than costs 
D) Faithful representation

Question 18

Why might SFAC No. 5 be considered a "failure"?

Accepted Answer

SFAC No. 5 did not deal extensively with

Question 19

Respond to the following:
a.How is net income different from earnings in SFAC No. 5?
b.What is comprehensive income?

Accepted Answer

a.One of the principal concerns of SFAC

Question 20

The definitions of SFAC No. 6 are virtually identical to those in SFAC No. 3 except that they are extended to non-business organizations.

Accepted Answer

A) True 
 B)False

SFAC No. 1 maintains that financial statements should be geared toward specific needs of particular user groups.

The jurisprudential view of the FASB is concerned with the theory embodied in the conceptual framework.

SFAC designated which of the following as the term to indicate the comprehensive or total change in net assets occurring during the period as a result of operations?

SFAC No. 1 takes the position that users of financial statements must be assumed to be knowledgeable about financial information and reporting.

The quality of understandability is a characteristic influenced by both users and preparers of accounting information.

With regard to users, SFAC No. 1 established that financial statements should be aimed at a common core of similar information users.

Which of the following is not part of the conceptual framework?

Under SFAC No. 8, which of the following are aspects of relevance?

Which of the following is a true statement?

"Economic consequences" is not part of the conceptual framework.

Explain the hierarchy of accounting qualities identified in SFAC No. 2.

Which of the following is not a true statement?

SFAC No. 5 appears to deny one of the main tenets of the efficient markets hypothesis.

Define the elements of financial statements identified in SFAC No. 3 and SFAC No. 6.

Comprehensive income as defined by SFAC No. 6 includes all changes in equity during a period.

Which of the following is not true regarding the discussion memorandum that preceded the conceptual framework?

Which component of the conceptual framework is perhaps the most difficult to apply in practice?

Why might SFAC No. 5 be considered a "failure"?

Respond to the following: a.How is net income different from earnings in SFAC No. 5? b.What is comprehensive income?

The definitions of SFAC No. 6 are virtually identical to those in SFAC No. 3 except that they are extended to non-business organizations.

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

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy-Making Directions

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 7: The Fasbs Conceptual Framework

SFAC No. 1 maintains that financial statements should be geared toward specific needs of particular user groups.

The jurisprudential view of the FASB is concerned with the theory embodied in the conceptual framework.

SFAC designated which of the following as the term to indicate the comprehensive or total change in net assets occurring during the period as a result of operations?

SFAC No. 1 takes the position that users of financial statements must be assumed to be knowledgeable about financial information and reporting.

The quality of understandability is a characteristic influenced by both users and preparers of accounting information.

With regard to users, SFAC No. 1 established that financial statements should be aimed at a common core of similar information users.

Which of the following is not part of the conceptual framework?

Under SFAC No. 8, which of the following are aspects of relevance?

Which of the following is a true statement?

"Economic consequences" is not part of the conceptual framework.

Explain the hierarchy of accounting qualities identified in SFAC No. 2.

Which of the following is not a true statement?

SFAC No. 5 appears to deny one of the main tenets of the efficient markets hypothesis.

Define the elements of financial statements identified in SFAC No. 3 and SFAC No. 6.

Comprehensive income as defined by SFAC No. 6 includes all changes in equity during a period.

Which of the following is not true regarding the discussion memorandum that preceded the conceptual framework?

Which component of the conceptual framework is perhaps the most difficult to apply in practice?

Why might SFAC No. 5 be considered a "failure"?

Respond to the following: a.How is net income different from earnings in SFAC No. 5? b.What is comprehensive income?

The definitions of SFAC No. 6 are virtually identical to those in SFAC No. 3 except that they are extended to non-business organizations.

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

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy-Making Directions

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