Question 1

Which of the following organizations published "A Statement of Basic Accounting Theory" (ASOBAT)?

Accepted Answer

A) AAA 
B) AICPA 
C) APB 
D) CAP 
A) AAA 
B) AICPA 
C) APB 
D) CAP

Question 2

SATTA expressed the opinion that choice among accounting theories could not be made at the time because of the diversity of users and their presumably different objectives and information needs.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following documents defined accounting as a service activity whose function is "to provide quantitative information... that is intended to be useful in making economic decisions"?

Accepted Answer

A) "Objectives of Financial Statements" (Trueblood Committee Report) 
B) "Basic Concepts and Accounting Principles Underlying Financial Statements of Business Enterprises" (APB Statement 4) 
C) "A Statement of Basic Accounting Theory" (ASOBAT) 
D) "Statement of Accounting Theory and Theory Acceptance" (SATT
A)  
A) "Objectives of Financial Statements" (Trueblood Committee Report) 
B) "Basic Concepts and Accounting Principles Underlying Financial Statements of Business Enterprises" (APB Statement 4) 
C) "A Statement of Basic Accounting Theory" (ASOBAT) 
D) "Statement of Accounting Theory and Theory Acceptance" (SATT
A)

Question 4

Which of the following standards is related to the qualitative characteristic of neutrality?

Accepted Answer

A) Quantifiability 
B) Freedom from bias 
C) Usefulness 
D) Objectivity 
A) Quantifiability 
B) Freedom from bias 
C) Usefulness 
D) Objectivity

Question 5

What is the most common thread running through various documents, reports, and monographs discussed in the text?

Accepted Answer

A) The historical cost method of income measurement is as good a predictor of itself as other methods. 
B) Financial statements should be relevant to users for decision-making purposes. 
C) Earning-power measurements are essential to the prediction of future cash flows. 
D) The same valuation base should be used for all assets and all liabilities. 
A) The historical cost method of income measurement is as good a predictor of itself as other methods. 
B) Financial statements should be relevant to users for decision-making purposes. 
C) Earning-power measurements are essential to the prediction of future cash flows. 
D) The same valuation base should be used for all assets and all liabilities.

Question 6

The major objectives of financial statements are:

Accepted Answer

A) capital maintenance measurement and adaptability. 
B) accountability and adaptability. 
C) predictive ability and accountability. 
D) capital maintenance and predictive ability. 
A) capital maintenance measurement and adaptability. 
B) accountability and adaptability. 
C) predictive ability and accountability. 
D) capital maintenance and predictive ability.

Question 7

Which of the following statements is true regarding accountability?

Accepted Answer

A) Accountability refers to a narrower concept than does stewardship. 
B) Measurements based on the accountability objective include earnings per share but not return on investment. 
C) The question of which valuation system provides the best input for accountability-oriented measurement is unimportant. 
D) Accountability refers to the responsibility of management to report on achieving goals for the effective and efficient utilization of enterprise resources. 
A) Accountability refers to a narrower concept than does stewardship. 
B) Measurements based on the accountability objective include earnings per share but not return on investment. 
C) The question of which valuation system provides the best input for accountability-oriented measurement is unimportant. 
D) Accountability refers to the responsibility of management to report on achieving goals for the effective and efficient utilization of enterprise resources.

Question 8

According to Sorter and Gans, which of the following describes the intent of the Trueblood Committee Report's second financial statement objective?

Accepted Answer

A) Financial statements should serve those with limited ability. 
B) Financial statements should serve special needs of specific users. 
C) Financial statements should serve the general needs of users. 
D) Financial statement should serve only those users who are very knowledgeable about financial statements and information. 
A) Financial statements should serve those with limited ability. 
B) Financial statements should serve special needs of specific users. 
C) Financial statements should serve the general needs of users. 
D) Financial statement should serve only those users who are very knowledgeable about financial statements and information.

Question 9

Which of the following is true regarding the predictive ability of accounting data?

Accepted Answer

A) The predictive ability objective is validated by market efficiency. 
B) Previous studies have indicated that historical cost income is not as good a predictor of itself as general price-level-adjusted income or current value income. 
C) Studies have found that income measurement methods that have the greatest predictive ability are also best in terms of most other objectives. 
D) Predictive ability is the same as the quantifiability standard of ASOBAT. 
A) The predictive ability objective is validated by market efficiency. 
B) Previous studies have indicated that historical cost income is not as good a predictor of itself as general price-level-adjusted income or current value income. 
C) Studies have found that income measurement methods that have the greatest predictive ability are also best in terms of most other objectives. 
D) Predictive ability is the same as the quantifiability standard of ASOBAT.

Question 10

Which of the following standards is related to measurement theory?

Accepted Answer

A) Quantifiability 
B) Freedom from bias 
C) Usefulness 
D) Objectivity 
A) Quantifiability 
B) Freedom from bias 
C) Usefulness 
D) Objectivity

Question 11

Relevance is considered the most important of the qualitative objectives of APB Statement 4.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not one of the four objectives of accounting given by ASOBAT?

Accepted Answer

A) To make decisions concerning the use of limited resources (including the identification of crucial decision areas) and to determine objectives and goals 
B) To direct and control an organization's human and material resources effectively 
C) To relate the evaluative framework of standards and guidelines to the objectives themselves 
D) To facilitate social functions and controls 
A) To make decisions concerning the use of limited resources (including the identification of crucial decision areas) and to determine objectives and goals 
B) To direct and control an organization's human and material resources effectively 
C) To relate the evaluative framework of standards and guidelines to the objectives themselves 
D) To facilitate social functions and controls

Question 13

Which of the following statements is not true regarding the Trueblood Committee?

Accepted Answer

A) It was formed at a time when the APB was under heavy criticism. 
B) It was formed when very little progress was being made in terms of reformulating the structure of accounting theory. 
C) It was charged with using APB Statement 4 as a vehicle for refining the objective of financial statements. 
D) It enumerated a total of twelve objectives of financial accounting. 
A) It was formed at a time when the APB was under heavy criticism. 
B) It was formed when very little progress was being made in terms of reformulating the structure of accounting theory. 
C) It was charged with using APB Statement 4 as a vehicle for refining the objective of financial statements. 
D) It enumerated a total of twelve objectives of financial accounting.

Question 14

ASOBAT emphasized which of the following in its definition of accounting?

Accepted Answer

A) The creative ability of the accountant 
B) The work and skill of the accountant 
C) The needs of the users of accounting information 
D) Recording transactions 
A) The creative ability of the accountant 
B) The work and skill of the accountant 
C) The needs of the users of accounting information 
D) Recording transactions

Question 15

The Chartered Financial Analysts' business reporting model for equity investors shows a preference for relevance over reliability.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not a problem of APB Statement 4 mentioned in the text?

Accepted Answer

A) It is questionable whether the objectives can be implemented by means of the various principles derived from the existing body of accounting. 
B) It contains a loosely worded set of definitions. 
C) It attempts to be all things to all people. 
D) It does not state important evolutionary changes that had begun to occur. 
A) It is questionable whether the objectives can be implemented by means of the various principles derived from the existing body of accounting. 
B) It contains a loosely worded set of definitions. 
C) It attempts to be all things to all people. 
D) It does not state important evolutionary changes that had begun to occur.

Question 17

What was the purpose of SATTA?

Accepted Answer

A) To develop standards for accounting 
B) To determine an appropriate valuation system for financial statements 
C) To provide a survey of the current financial accounting literature and a statement of where the profession stood relative to accounting theory 
D) To develop metatheoretical guidelines for the evaluation of accounting information and valuation systems 
A) To develop standards for accounting 
B) To determine an appropriate valuation system for financial statements 
C) To provide a survey of the current financial accounting literature and a statement of where the profession stood relative to accounting theory 
D) To develop metatheoretical guidelines for the evaluation of accounting information and valuation systems

Question 18

A problem brought up by SATTA is the diversity of users in terms of their decisions and their possible different information needs.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following organizations published "Objectives of Financial Statements" (Trueblood Committee Report)?

Accepted Answer

A) AAA 
B) AICPA 
C) APB 
D) CAP 
A) AAA 
B) AICPA 
C) APB 
D) CAP

Question 20

APB Statement 4 adopted a very strong emphasis on the diversity of users.

Accepted Answer

A) True 
 B)False

Which of the following organizations published "A Statement of Basic Accounting Theory" (ASOBAT)?

SATTA expressed the opinion that choice among accounting theories could not be made at the time because of the diversity of users and their presumably different objectives and information needs.

Which of the following documents defined accounting as a service activity whose function is "to provide quantitative information... that is intended to be useful in making economic decisions"?

Which of the following standards is related to the qualitative characteristic of neutrality?

What is the most common thread running through various documents, reports, and monographs discussed in the text?

The major objectives of financial statements are:

Which of the following statements is true regarding accountability?

According to Sorter and Gans, which of the following describes the intent of the Trueblood Committee Report's second financial statement objective?

Which of the following is true regarding the predictive ability of accounting data?

Which of the following standards is related to measurement theory?

Relevance is considered the most important of the qualitative objectives of APB Statement 4.

Which of the following is not one of the four objectives of accounting given by ASOBAT?

Which of the following statements is not true regarding the Trueblood Committee?

ASOBAT emphasized which of the following in its definition of accounting?

The Chartered Financial Analysts' business reporting model for equity investors shows a preference for relevance over reliability.

Which of the following is not a problem of APB Statement 4 mentioned in the text?

What was the purpose of SATTA?

A problem brought up by SATTA is the diversity of users in terms of their decisions and their possible different information needs.

Which of the following organizations published "Objectives of Financial Statements" (Trueblood Committee Report)?

APB Statement 4 adopted a very strong emphasis on the diversity of users.

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

Exam 6: The Search for Objectives

Which of the following organizations published "A Statement of Basic Accounting Theory" (ASOBAT)?

SATTA expressed the opinion that choice among accounting theories could not be made at the time because of the diversity of users and their presumably different objectives and information needs.

Which of the following documents defined accounting as a service activity whose function is "to provide quantitative information... that is intended to be useful in making economic decisions"?

Which of the following standards is related to the qualitative characteristic of neutrality?

What is the most common thread running through various documents, reports, and monographs discussed in the text?

The major objectives of financial statements are:

Which of the following statements is true regarding accountability?

According to Sorter and Gans, which of the following describes the intent of the Trueblood Committee Report's second financial statement objective?

Which of the following is true regarding the predictive ability of accounting data?

Which of the following standards is related to measurement theory?

Relevance is considered the most important of the qualitative objectives of APB Statement 4.

Which of the following is not one of the four objectives of accounting given by ASOBAT?

Which of the following statements is not true regarding the Trueblood Committee?

ASOBAT emphasized which of the following in its definition of accounting?

The Chartered Financial Analysts' business reporting model for equity investors shows a preference for relevance over reliability.

Which of the following is not a problem of APB Statement 4 mentioned in the text?

What was the purpose of SATTA?

A problem brought up by SATTA is the diversity of users in terms of their decisions and their possible different information needs.

Which of the following organizations published "Objectives of Financial Statements" (Trueblood Committee Report)?

APB Statement 4 adopted a very strong emphasis on the diversity of users.

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