Exam 1: An Introduction to Accounting Theory

In an accounting context, which of the following represents the degree of consensus among measurers in situations where a given group of measurers having similar instruments and constraints group measures the same attribute of a given object?

All accounting measurements are of either the assessment or the prediction variety.

In attempting to analyze the worth of an accounting measure, which of the following qualities is not mentioned in the text as an important consideration?

The discounted cash flow approach can be used to determine an objective measurement for most assets and liabilities.

Discuss the difference between direct measurement and indirect measurement. Give examples of each in an accounting context.

Prediction measures are concerned with factors that may be indicative of future conditions.

A chart of accounts is an example of an ordinal classification.

Which of the following is a measure of predictive ability?

The use of which of the following types of measurement scales in accounting allows meaningful comparisons among similar accounting measurements for different firms?

FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rather than measurements.

Which of the following valuation methods is frequently referred to as a process of orderly liquidation?

If a number assigned to an object is an actual measurement of a property of the object, it is referred to as a(n):

Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures.

Which of the following has/have been the accepted valuation system for published financial statements throughout the financial history of the United States?

There are often trade-offs between objectivity and the usefulness of numbers generated by the measurement process.

Which of the following is an example of a measurement rather than a calculation?

Hypotheses and theories are based on an informal method of investigation.

The principal argument used to justify the replacement cost system over exit values is that if the great majority of the firm's assets were not already owned, it would be economically justifiable to acquire them.

Assessment measures are not concerned with particular attributes of objects.

Which of the following methods of valuing an asset is based on the amount that would be paid for it in markets where the asset would ordinarily be acquired?