Question 1

Codification is a justification of the standard-setting process itself rather than of the individual standards that result from that process.

Accepted Answer

A) True 
 B)False

Question 2

Why might SFAC No. 5 be considered a "failure"?

Accepted Answer

SFAC No. 5 did not deal extensively with

Question 3

The idea that a measurement should correspond with the phenomenon it is attempting to measure is referred to in the conceptual framework as:

Accepted Answer

A)  Reliability. 
B)  Relevance. 
C)  Faithful representation. 
D)  Understandability. 
A)  Reliability. 
B)  Relevance. 
C)  Faithful representation. 
D)  Understandability.

Question 4

SFAC No. 8 included the true and fair view in the qualitative characteristics of accounting.

Accepted Answer

A) True 
 B)False

Question 5

The objectives of business financial reporting detailed in the conceptual framework proceeded directly from which of the following documents?

Accepted Answer

A)  The Trueblood Report 
B)  SATTA 
C)  APB Statement 4 
D)  ASOBAT 
A)  The Trueblood Report 
B)  SATTA 
C)  APB Statement 4 
D)  ASOBAT

Question 6

Comprehensive income as defined by SFAC No. 6 includes all changes in equity during a period.

Accepted Answer

A) True 
 B)False

Question 7

SFAC designated which of the following as the term to indicate the comprehensive or total change in net assets occurring during the period as a result of operations?

Accepted Answer

A)  Income 
B)  Earnings 
C)  Revenue 
D)  Profits 
A)  Income 
B)  Earnings 
C)  Revenue 
D)  Profits

Question 8

Timeliness and predictive value are the two main aspect of relevance.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a true statement?

Accepted Answer

A)  The eight SFACs that comprise the conceptual framework were not evolutionary because they were derived from previous documents such as the Trueblood Report and ASOBAT. 
B)  The definitions of SFAC No. 6 were basically a restatement of the definitions of APB Statement 4. 
C)  The Achilles' heel of the document is SFAC No. 5, which reaffirmed historical cost as the basic measurement system. 
D)  The key document in the series of SFACs that comprise the conceptual framework is SFAC No. 1. 
A)  The eight SFACs that comprise the conceptual framework were not evolutionary because they were derived from previous documents such as the Trueblood Report and ASOBAT. 
B)  The definitions of SFAC No. 6 were basically a restatement of the definitions of APB Statement 4. 
C)  The Achilles' heel of the document is SFAC No. 5, which reaffirmed historical cost as the basic measurement system. 
D)  The key document in the series of SFACs that comprise the conceptual framework is SFAC No. 1.

Question 10

Discuss the criticisms that of SFAC No. 6?

Accepted Answer

The definitions of the elements of finan

Question 11

Respond to the following:
a.
How is net income different from earnings in SFAC No. 5?
b.
What is comprehensive income?

Accepted Answer

a.
One of the principal concerns of SFAC

Question 12

The conceptual framework is an attempt to provide a metatheoretical structure for financial accounting.

Accepted Answer

A) True 
 B)False

Question 13

Do the SFACs that constitute the conceptual framework establish generally accepted accounting principles? What are the benefits and limitations of this approach?

Accepted Answer

The SFACs that constitute the conceptual

Question 14

According to SFAC No. 4, "earnings" is the indicator of a nonbusiness organization's performance that is comparable to "income" in the profit sector.

Accepted Answer

A) True 
 B)False

Question 15

Opinion is virtually unanimous that SFAC No. 5 on recognition and measurement is the low point of the conceptual framework.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a true statement?

Accepted Answer

A)  Predictive value refers to usefulness of inputs for predictions rather than being an actual prediction itself. 
B)  Timeliness complements rather than conflicts with the other aspects of relevance because information is more complete and accurate if it is timely. 
C)  The conceptual framework stressed predictive value rather than the importance of decision making by outside users. 
D)  Timeliness and predictive value are the two main aspects of relevance. 
A)  Predictive value refers to usefulness of inputs for predictions rather than being an actual prediction itself. 
B)  Timeliness complements rather than conflicts with the other aspects of relevance because information is more complete and accurate if it is timely. 
C)  The conceptual framework stressed predictive value rather than the importance of decision making by outside users. 
D)  Timeliness and predictive value are the two main aspects of relevance.

Question 17

The qualitative characteristics of accounting on which the conceptual framework is centered come under the general heading of:

Accepted Answer

A)  Relevance. 
B)  Materiality. 
C)  Representational faithfulness. 
D)  Decision usefulness. 
A)  Relevance. 
B)  Materiality. 
C)  Representational faithfulness. 
D)  Decision usefulness.

Question 18

Which statement in the conceptual framework deals with qualitative characteristics of accounting information? Note that SFAC No. 8 replaces this older SFAC.

Accepted Answer

A)  SFAC No. 1 
B)  SFAC No. 2 
C)  SFAC No. 3 
D)  SFAC No. 5 
A)  SFAC No. 1 
B)  SFAC No. 2 
C)  SFAC No. 3 
D)  SFAC No. 5

Question 19

Which of the following is not true regarding the discussion memorandum that preceded the conceptual framework?

Accepted Answer

A)  It represented the end product of the FASB's deliberations related to the conceptual framework project. 
B)  The most important new issue brought up in the document was capital maintenance. 
C)  It brought up three views of financial accounting and financial statements. 
D)  It presented various definitions for basic accounting terms. 
A)  It represented the end product of the FASB's deliberations related to the conceptual framework project. 
B)  The most important new issue brought up in the document was capital maintenance. 
C)  It brought up three views of financial accounting and financial statements. 
D)  It presented various definitions for basic accounting terms.

Codification is a justification of the standard-setting process itself rather than of the individual standards that result from that process.

Why might SFAC No. 5 be considered a "failure"?

The idea that a measurement should correspond with the phenomenon it is attempting to measure is referred to in the conceptual framework as:

SFAC No. 8 included the true and fair view in the qualitative characteristics of accounting.

The objectives of business financial reporting detailed in the conceptual framework proceeded directly from which of the following documents?

Comprehensive income as defined by SFAC No. 6 includes all changes in equity during a period.

SFAC designated which of the following as the term to indicate the comprehensive or total change in net assets occurring during the period as a result of operations?

Timeliness and predictive value are the two main aspect of relevance.

Which of the following is a true statement?

Discuss the criticisms that of SFAC No. 6?

Respond to the following: a. How is net income different from earnings in SFAC No. 5? b. What is comprehensive income?

The conceptual framework is an attempt to provide a metatheoretical structure for financial accounting.

Do the SFACs that constitute the conceptual framework establish generally accepted accounting principles? What are the benefits and limitations of this approach?

According to SFAC No. 4, "earnings" is the indicator of a nonbusiness organization's performance that is comparable to "income" in the profit sector.

Opinion is virtually unanimous that SFAC No. 5 on recognition and measurement is the low point of the conceptual framework.

Which of the following is a true statement?

The qualitative characteristics of accounting on which the conceptual framework is centered come under the general heading of:

Which statement in the conceptual framework deals with qualitative characteristics of accounting information? Note that SFAC No. 8 replaces this older SFAC.

Which of the following is not true regarding the discussion memorandum that preceded the conceptual framework?

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

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

Accounting for Inflation and Changing Prices

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Exam 7: The Fasbs Conceptual Framework

Codification is a justification of the standard-setting process itself rather than of the individual standards that result from that process.

Why might SFAC No. 5 be considered a "failure"?

The idea that a measurement should correspond with the phenomenon it is attempting to measure is referred to in the conceptual framework as:

SFAC No. 8 included the true and fair view in the qualitative characteristics of accounting.

The objectives of business financial reporting detailed in the conceptual framework proceeded directly from which of the following documents?

Comprehensive income as defined by SFAC No. 6 includes all changes in equity during a period.

SFAC designated which of the following as the term to indicate the comprehensive or total change in net assets occurring during the period as a result of operations?

Timeliness and predictive value are the two main aspect of relevance.

Which of the following is a true statement?

Discuss the criticisms that of SFAC No. 6?

Respond to the following: a. How is net income different from earnings in SFAC No. 5? b. What is comprehensive income?

The conceptual framework is an attempt to provide a metatheoretical structure for financial accounting.

Do the SFACs that constitute the conceptual framework establish generally accepted accounting principles? What are the benefits and limitations of this approach?

According to SFAC No. 4, "earnings" is the indicator of a nonbusiness organization's performance that is comparable to "income" in the profit sector.

Opinion is virtually unanimous that SFAC No. 5 on recognition and measurement is the low point of the conceptual framework.

Which of the following is a true statement?

The qualitative characteristics of accounting on which the conceptual framework is centered come under the general heading of:

Which statement in the conceptual framework deals with qualitative characteristics of accounting information? Note that SFAC No. 8 replaces this older SFAC.

Which of the following is not true regarding the discussion memorandum that preceded the conceptual framework?

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

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

Accounting for Inflation and Changing Prices

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters