Question 1

Which of the following describes "deprival value"?

Accepted Answer

A)  It is a not a good measurement of fair value. 
B)  It is the higher of exit value and replacement cost. 
C)  It measures the opportunity cost to the enterprise of doing without the asset. 
D)  It is the lower of exit value and or present value of future cash flow. 
A)  It is a not a good measurement of fair value. 
B)  It is the higher of exit value and replacement cost. 
C)  It measures the opportunity cost to the enterprise of doing without the asset. 
D)  It is the lower of exit value and or present value of future cash flow. C

Question 2

Which of the following is not a true statement regarding John C. Burton, former chief accountant of the SEC?

Accepted Answer

A)  His influence moved the development of accounting for changing prices significantly forward. 
B)  He believed that any changes in financial reporting should be made to the measurement system itself. 
C)  He believed that inflation creates greater distortions when the current cost approach to measurement is used. 
D)  He had doubts as to whether a system using general price-level adjustments would provide any benefit. 
A)  His influence moved the development of accounting for changing prices significantly forward. 
B)  He believed that any changes in financial reporting should be made to the measurement system itself. 
C)  He believed that inflation creates greater distortions when the current cost approach to measurement is used. 
D)  He had doubts as to whether a system using general price-level adjustments would provide any benefit. C

Question 3

Current cost represents an attempt to derive the specific value or worth for a particular point or period in time of assets, liabilities, expenses, and revenues.

Accepted Answer

A) True 
 B)False  True

Question 4

SFAS No. 157 is grounded in the belief that historical costing is more important than current values.

Accepted Answer

A) True 
 B)False

Question 5

SFAS No. 33 required both constant dollar and current-cost-adjusted income.

Accepted Answer

A) True 
 B)False

Question 6

Distinguish between monetary holding gains and losses and real holding gains and losses.

Accepted Answer

Monetary holding gains and losses arise

Question 7

SFAS No. 82 eliminated the constant dollar income disclosures required by SFAS No.33.

Accepted Answer

A) True 
 B)False

Question 8

Deprival value is computed by taking the lower of Present Value and Net Realizable Value and then the lower of the survivor and Entry Value.

Accepted Answer

A) True 
 B)False

Question 9

A monetary holding gains are the difference between general price-level-adjustment amounts and current value.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following was required by SFAS No. 33 as the basis of primary financial statements?

Accepted Answer

A)  Historical cost 
B)  Current cost 
C)  Present value of future cash flows 
D)  Net realizable value 
A)  Historical cost 
B)  Current cost 
C)  Present value of future cash flows 
D)  Net realizable value

Question 11

According to the text, which of the following has posed the single greatest problem that is faced in accounting theory?

Accepted Answer

A)  Historical costing 
B)  Additivity 
C)  Inflation 
D)  Price-level adjustments 
A)  Historical costing 
B)  Additivity 
C)  Inflation 
D)  Price-level adjustments

Question 12

SFAS No. 33 required enterprises to report supplementary information under

Accepted Answer

A)  A constant dollar approach 
B)  A current cost approach 
C)  Both constant dollar and current cost approaches 
D)  None of the above 
A)  A constant dollar approach 
B)  A current cost approach 
C)  Both constant dollar and current cost approaches 
D)  None of the above

Question 13

Monetary assets and liabilities do not include notes receivable and payable.

Accepted Answer

A) True 
 B)False

Question 14

SFAS No. 157 may result in a decrease in financial statement comparability among firms.

Accepted Answer

A) True 
 B)False

Question 15

A general price index is broadly constructed for ascertaining the change in prices for all goods and services.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a true statement?

Accepted Answer

A)  Shortly after its inception, the FASB issued an exposure draft that proposed requiring the presentation of, as supplemental information, the balance sheet and income statement restated in units of general purchasing power. 
B)  The Trueblood Commission committed itself to support of the current value concept. 
C)  In ASR 190, the SEC reinforced its long-standing position of forbidding the presentation of information other than historical cost. 
D)  The AAA has always opposed price-level restated financial statements. 
A)  Shortly after its inception, the FASB issued an exposure draft that proposed requiring the presentation of, as supplemental information, the balance sheet and income statement restated in units of general purchasing power. 
B)  The Trueblood Commission committed itself to support of the current value concept. 
C)  In ASR 190, the SEC reinforced its long-standing position of forbidding the presentation of information other than historical cost. 
D)  The AAA has always opposed price-level restated financial statements.

Question 17

SFAS No. 89 continued the requirement that current cost income measurement, purchasing power gain or loss and holding gain information be disclosed.

Accepted Answer

A) True 
 B)False

Question 18

Entry value refers to replacement cost in markets in which the asset, liability, or expense ordinarily acquired.

Accepted Answer

A) True 
 B)False

Question 19

SFAS No. 33 specified which of the following as the basis of primary financial statements?

Accepted Answer

A)  Replacement cost 
B)  Nominal historical cost 
C)  Current value 
D)  Constant dollar 
A)  Replacement cost 
B)  Nominal historical cost 
C)  Current value 
D)  Constant dollar

Question 20

Respond to the following:
a.
Explain what is meant by price indexes.
b.
Compare and contrast the two types of price indexes, specific price indexes and general price indexes.
c.
How did SFAS No. 33 make use of price indexes?

Accepted Answer

a.
Price indexes are weighted averages o

Which of the following describes "deprival value"?

Which of the following is not a true statement regarding John C. Burton, former chief accountant of the SEC?

Current cost represents an attempt to derive the specific value or worth for a particular point or period in time of assets, liabilities, expenses, and revenues.

SFAS No. 157 is grounded in the belief that historical costing is more important than current values.

SFAS No. 33 required both constant dollar and current-cost-adjusted income.

Distinguish between monetary holding gains and losses and real holding gains and losses.

SFAS No. 82 eliminated the constant dollar income disclosures required by SFAS No.33.

Deprival value is computed by taking the lower of Present Value and Net Realizable Value and then the lower of the survivor and Entry Value.

A monetary holding gains are the difference between general price-level-adjustment amounts and current value.

Which of the following was required by SFAS No. 33 as the basis of primary financial statements?

According to the text, which of the following has posed the single greatest problem that is faced in accounting theory?

SFAS No. 33 required enterprises to report supplementary information under

Monetary assets and liabilities do not include notes receivable and payable.

SFAS No. 157 may result in a decrease in financial statement comparability among firms.

A general price index is broadly constructed for ascertaining the change in prices for all goods and services.

Which of the following is a true statement?

SFAS No. 89 continued the requirement that current cost income measurement, purchasing power gain or loss and holding gain information be disclosed.

Entry value refers to replacement cost in markets in which the asset, liability, or expense ordinarily acquired.

SFAS No. 33 specified which of the following as the basis of primary financial statements?

Respond to the following: a. Explain what is meant by price indexes. b. Compare and contrast the two types of price indexes, specific price indexes and general price indexes. c. How did SFAS No. 33 make use of price indexes?

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

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

Statements of Cash Flows

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Exam 14: Accounting for Inflation and Changing Prices

Which of the following describes "deprival value"?

Which of the following is not a true statement regarding John C. Burton, former chief accountant of the SEC?

Current cost represents an attempt to derive the specific value or worth for a particular point or period in time of assets, liabilities, expenses, and revenues.

SFAS No. 157 is grounded in the belief that historical costing is more important than current values.

SFAS No. 33 required both constant dollar and current-cost-adjusted income.

Distinguish between monetary holding gains and losses and real holding gains and losses.

SFAS No. 82 eliminated the constant dollar income disclosures required by SFAS No.33.

Deprival value is computed by taking the lower of Present Value and Net Realizable Value and then the lower of the survivor and Entry Value.

A monetary holding gains are the difference between general price-level-adjustment amounts and current value.

Which of the following was required by SFAS No. 33 as the basis of primary financial statements?

According to the text, which of the following has posed the single greatest problem that is faced in accounting theory?

SFAS No. 33 required enterprises to report supplementary information under

Monetary assets and liabilities do not include notes receivable and payable.

SFAS No. 157 may result in a decrease in financial statement comparability among firms.

A general price index is broadly constructed for ascertaining the change in prices for all goods and services.

Which of the following is a true statement?

SFAS No. 89 continued the requirement that current cost income measurement, purchasing power gain or loss and holding gain information be disclosed.

Entry value refers to replacement cost in markets in which the asset, liability, or expense ordinarily acquired.

SFAS No. 33 specified which of the following as the basis of primary financial statements?

Respond to the following: a. Explain what is meant by price indexes. b. Compare and contrast the two types of price indexes, specific price indexes and general price indexes. c. How did SFAS No. 33 make use of price indexes?

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

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

Statements of Cash Flows

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters