Exam 4: Accounting Principles and End-Of-Period Adjustments

Using historical cost,at what time are assets recorded at the amount of cash or cash equivalents paid,or the fair value of the consideration given to acquire them?

Using replacement cost,at what time are liabilities carried at the undiscounted amount of cash,or cash equivalents,that would be required to settle the obligation?

What effect does the adjusting entry recognizing interest expense have on the basic accounting equation?

If the resale price of an item in inventory decreases below its acquisition or manufacturing cost,when should the loss in value be recognized?

Where there is modest inflation,accounting assumes that the purchasing power of the monetary unit is:

A business has two bank accounts: one has a positive balance of 50 CU and the second has a negative balance of 70 CU.What should be reported in the balance sheet?

Financial accounting only records transactions expressed in financial units.

The going concern principle is a key reason for valuing assets and resources or liabilities at their historical costs rather than at their ____ value.

What are the four critical requirements or constraints which information users place on accounting?

There is an officially recognized and generally accepted definition of 'true and fair' as it applies to financial statements.

The IASB (IAS 16)defines fixed or tangible assets as assets held by an entity for which purpose(s)?

Why is it necessary to know the income generated by the managers' decisions and actions?

When an error is uncovered,the most common solution is to cancel the erroneous entry by means of:

A 'contra asset' account is listed in the balance sheet on the assets side but with a negative (credit)balance.

Assets and liabilities should not be offset except when offsetting is specifically required or permitted by an accounting standard.

Why is a physical inventory of existing fixed assets carried out on a regular basis?

How often are firms generally required to report their financial position?

Which of the following is an example of an adjusting entry?

Which measurement basis should be used to prepare the financial statements when a business is liquidated?

Which of the following fixed assets is not subject to downward value adjustments?