Exam 6: The Search for Objectives

Respond to the following: a.What is the decision usefulness approach to accounting theory? b.What are the characteristics and limitations of the decision-model approach? c.What are the characteristics of the decision-maker approach?

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Question 1

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a.The decision usefulness approach is a contemporary approach to accounting theory that has concentrated on users of accounting reports, their decisions, information needs, and information-processing abilities. This approach has been further dichotomized into decision models and decision-makers.
b.The characteristics of the decision-model approach are:
(1)They are normative and deductive.
(2)Some form of relevance for particular decisions by a particular user group or groups is stressed.
(3)The relevance criterion is instrumental in measuring the selected attributes of assets, liabilities, and income transactions.
Since decision-model approaches are deemed appropriate for communicating extremely relevant information for decision-making, an argument can be made that users must be educated to understand the method.
c.The decision-maker approach is descriptive and inductive. It attempts to find out what information is actually used or desired, the assumption being that the information that is desired should be supplied.

Which of the following documents contained a definition of accounting that fortified the perception of the accountant as a learned professional whose presentation must be accepted by those who do not have his qualifications and credentials?

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Question 2

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The secondary objectives of financial statements are:

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Question 3

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The Trueblood report noted that, during the short run, cash flows are a better predictor of cash-generating power than are earnings.

(True/False)

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Question 4

Which of the following documents stated fundamental concepts of financial reporting that would serve as a foundation for the opinions of the APB?

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Question 5

Identify the major contributions of APB Statement 4.

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Question 6

APB Statement No. 4 acknowledges a conflict between the relevance and reliability objectives.

(True/False)

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Question 7

Large parts of APB Statement 4 are restatements of the conventional wisdom of the time.

(True/False)

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Question 8

Accountability refers to the responsibility of management to report on achieving goals for the effective and efficient utilization of enterprise resources.

(True/False)

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Question 9

Which of the following set of standards is at the heart ASOBAT?

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Question 10

The postulates and principles approach was concerned with user objectives.

(True/False)

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Question 11

Which of the following documents expressed the opinion that a choice among accounting valuation systems could not be made because of the diversity of users?

(Multiple Choice)

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Question 12

How did the definition of accounting change from the period before ASOBAT to the issuance of SATTA in 1977?

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Question 13

List and define the four standards for evaluating accounting that are at the heart of ASOBAT.

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Question 14

In the Trueblood Committee Report, the meaning of the word accountability is limited to the functions of safekeeping of assets and ensuring that they are used in accordance with investors' purposes.

(True/False)

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Question 15

The purpose of SATTA was to provide a survey of the current financial accounting literature and a statement of where the profession stood relative to accounting theory.

(True/False)

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Question 16

According to the text, "limited ability" in the Trueblood Committee Report's second financial statement objective may refer to:

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Question 17

According to the Trueblood Committee Report, current values should be reported when they differ significantly from historical costs.

(True/False)

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Question 18

Empirical research has proven that user needs are heterogeneous.

(True/False)

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Question 19

The main problem standing in the way of newer information approaches is the perceived competitive disadvantage of making public matters that management would prefer to keep secret.

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Question 20

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Respond to the following: a.What is the decision usefulness approach to accounting theory? b.What are the characteristics and limitations of the decision-model approach? c.What are the characteristics of the decision-maker approach?

Which of the following documents contained a definition of accounting that fortified the perception of the accountant as a learned professional whose presentation must be accepted by those who do not have his qualifications and credentials?

The secondary objectives of financial statements are:

The Trueblood report noted that, during the short run, cash flows are a better predictor of cash-generating power than are earnings.

Which of the following documents stated fundamental concepts of financial reporting that would serve as a foundation for the opinions of the APB?

Identify the major contributions of APB Statement 4.

APB Statement No. 4 acknowledges a conflict between the relevance and reliability objectives.

Large parts of APB Statement 4 are restatements of the conventional wisdom of the time.

Accountability refers to the responsibility of management to report on achieving goals for the effective and efficient utilization of enterprise resources.

Which of the following set of standards is at the heart ASOBAT?

The postulates and principles approach was concerned with user objectives.

Which of the following documents expressed the opinion that a choice among accounting valuation systems could not be made because of the diversity of users?

How did the definition of accounting change from the period before ASOBAT to the issuance of SATTA in 1977?

List and define the four standards for evaluating accounting that are at the heart of ASOBAT.

In the Trueblood Committee Report, the meaning of the word accountability is limited to the functions of safekeeping of assets and ensuring that they are used in accordance with investors' purposes.

The purpose of SATTA was to provide a survey of the current financial accounting literature and a statement of where the profession stood relative to accounting theory.

According to the text, "limited ability" in the Trueblood Committee Report's second financial statement objective may refer to:

According to the Trueblood Committee Report, current values should be reported when they differ significantly from historical costs.

Empirical research has proven that user needs are heterogeneous.

The main problem standing in the way of newer information approaches is the perceived competitive disadvantage of making public matters that management would prefer to keep secret.

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 Fasbs Conceptual Framework

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