Question 1

Uncertainty and risks inherent in business situations should be adequately considered in financial reporting.This statement is an example of the concept of

Accepted Answer

A) Conservatism 
B) Completeness 
C) Neutrality 
D) Representational faithfulness 
A) Conservatism 
B) Completeness 
C) Neutrality 
D) Representational faithfulness A

Question 2

Discuss the four types of income defined by Edwards and Bell.

Accepted Answer

The four types of income defined by Edwards and Bell are 1)current operating profit-the excess of sales revenues over the current cost of inputs used in production and sold,2)realizable cost savings-the increases in the prices of assets held during the period,3)realized cost savings-the difference between historical costs and the current purchase price of goods sold,and 4)realized capital gains-the excess of sales proceeds over historical costs on the disposal of long-term assets.Edwards and Bell contended that these measures are better indications of well-offness and provide users more information to analyze enterprise results.

Question 3

The term revenue recognition conventionally refers to

Accepted Answer

A) The process of identifying transactions to be recorded as revenue in an accounting period. 
B) The process of measuring and relating revenue and expenses of an enterprise for an accounting period. 
C) The earning process that gives rise to revenue realization. 
D) The process of identifying those transactions that result in an inflow of assets from customers. 
A) The process of identifying transactions to be recorded as revenue in an accounting period. 
B) The process of measuring and relating revenue and expenses of an enterprise for an accounting period. 
C) The earning process that gives rise to revenue realization. 
D) The process of identifying those transactions that result in an inflow of assets from customers. D

Question 4

Discuss the matching concept.

Accepted Answer

Once a company has fulfilled its crucial

Question 5

Under what condition is it proper to recognize revenues prior to the sale of the merchandise?

Accepted Answer

A) When the ultimate sale of the goods is at an assured sales price 
B) When the revenue is to be reported as an installment sale 
C) When the concept of internal consistency of amounts of revenue)must be complied with 
D) When management has a long-established policy to do so 
A) When the ultimate sale of the goods is at an assured sales price 
B) When the revenue is to be reported as an installment sale 
C) When the concept of internal consistency of amounts of revenue)must be complied with 
D) When management has a long-established policy to do so

Question 6

The definition of the economic concept of income is usually attributed to which of the following economists?

Accepted Answer

A) J.R.Hicks 
B) Paul Samuelson 
C) Ben Bernanke 
D) Adam Smith 
A) J.R.Hicks 
B) Paul Samuelson 
C) Ben Bernanke 
D) Adam Smith

Question 7

Determining periodic earnings and financial position depends on measuring economic resources and obligations and changes in them as these changes occur.This explanation pertains to

Accepted Answer

A) Disclosure 
B) Accrual accounting 
C) Materiality 
D) The matching concept 
A) Disclosure 
B) Accrual accounting 
C) Materiality 
D) The matching concept

Question 8

The installment method of recognizing revenue is not acceptable for financial reporting if

Accepted Answer

A) The collectability of the sales price is reasonably assured 
B) The installment period is less than 12 months 
C) The method is applied to only a portion of the total 
D) Collection expenses can be reasonably predicted 
A) The collectability of the sales price is reasonably assured 
B) The installment period is less than 12 months 
C) The method is applied to only a portion of the total 
D) Collection expenses can be reasonably predicted

Question 9

Overstating sales returns or warranty costs in good times and using these overstatements in bad times to reduce similar charges,is the definition of which of the following earnings management techniques?

Accepted Answer

A) Taking a bath 
B) Creative acquisition accounting 
C) Creasing "cookie jar" reserves 
D) Abusing the materiality concept 
A) Taking a bath 
B) Creative acquisition accounting 
C) Creasing "cookie jar" reserves 
D) Abusing the materiality concept

Question 10

Each asset-inventory,plant,equipment,and so on-would be valued based on the selling price that would be realized if the firm chose to dispose of it is the definition of which of the following current value concepts?

Accepted Answer

A) Replacement cost 
B) Entry price 
C) Exit value 
D) Discounted present value 
A) Replacement cost 
B) Entry price 
C) Exit value 
D) Discounted present value

Question 11

Which of the following is not an approach to determining current value?

Accepted Answer

A) Replacement cost 
B) Thrift value 
C) Selling price 
D) Discounting present value 
A) Replacement cost 
B) Thrift value 
C) Selling price 
D) Discounting present value

Question 12

Which of the following accounting theorists called of conservatism the most influential principle of valuation in accounting?

Accepted Answer

A) Henry Sweeney 
B) Robert Sprouse 
C) Robert Sterling 
D) Edgar Edwards 
A) Henry Sweeney 
B) Robert Sprouse 
C) Robert Sterling 
D) Edgar Edwards

Question 13

The cost to replace assets with similar assets in a similar condition is the definition of which of the following current value concepts?

Accepted Answer

A) Replacement cost 
B) Selling price 
C) Exit value 
D) Discounted present value 
A) Replacement cost 
B) Selling price 
C) Exit value 
D) Discounted present value

Question 14

Deliberately recording errors or ignoring mistakes in the financial statements under the assumption that their impact is not significant,is the definition of which of the following earnings management techniques?

Accepted Answer

A) Taking a bath 
B) Creative acquisition accounting 
C) Creasing "cookie jar" reserves 
D) Abusing the materiality concept 
A) Taking a bath 
B) Creative acquisition accounting 
C) Creasing "cookie jar" reserves 
D) Abusing the materiality concept

Question 15

Conventionally accountants measure income

Accepted Answer

A) By applying a value added concept 
B) By using a transactions approach 
C) As a change in the value of owners' equity 
D) As a change in the purchasing power of owners' equity 
A) By applying a value added concept 
B) By using a transactions approach 
C) As a change in the value of owners' equity 
D) As a change in the purchasing power of owners' equity

Question 16

Which of the following is not a concept of income identified by Bedford?

Accepted Answer

A) Psychic 
B) Real 
C) Investment 
D) Money 
A) Psychic 
B) Real 
C) Investment 
D) Money

Question 17

Which of the following is an argument against using historical cost in accounting?

Accepted Answer

A) Fair values are more relevant. 
B) Historical costs are based on an exchange transaction. 
C) Historical costs are reliable. 
D) Fair values are subjective 
A) Fair values are more relevant. 
B) Historical costs are based on an exchange transaction. 
C) Historical costs are reliable. 
D) Fair values are subjective

Question 18

Discuss the difference between financial capital maintenance and physical capital maintenance.

Accepted Answer

There are two primary concepts of capita

Question 19

Discuss the differences between the economic and accounting concepts of income.

Accepted Answer

Economists generally agree that the obje

Question 20

Which of the following is not a criteria outlined in SEC Staff Accounting Bulletin No.101 for the recognition of revenue?

Accepted Answer

A) Persuasive evidence of an arrangement exists. 
B) Delivery has not occurred. 
C) The vendor's fee is fixed or determinable. 
D) Collectability is probable. 
A) Persuasive evidence of an arrangement exists. 
B) Delivery has not occurred. 
C) The vendor's fee is fixed or determinable. 
D) Collectability is probable.

Uncertainty and risks inherent in business situations should be adequately considered in financial reporting.This statement is an example of the concept of

Discuss the four types of income defined by Edwards and Bell.

The term revenue recognition conventionally refers to

Discuss the matching concept.

Under what condition is it proper to recognize revenues prior to the sale of the merchandise?

The definition of the economic concept of income is usually attributed to which of the following economists?

Determining periodic earnings and financial position depends on measuring economic resources and obligations and changes in them as these changes occur.This explanation pertains to

The installment method of recognizing revenue is not acceptable for financial reporting if

Overstating sales returns or warranty costs in good times and using these overstatements in bad times to reduce similar charges,is the definition of which of the following earnings management techniques?

Each asset-inventory,plant,equipment,and so on-would be valued based on the selling price that would be realized if the firm chose to dispose of it is the definition of which of the following current value concepts?

Which of the following is not an approach to determining current value?

Which of the following accounting theorists called of conservatism the most influential principle of valuation in accounting?

The cost to replace assets with similar assets in a similar condition is the definition of which of the following current value concepts?

Deliberately recording errors or ignoring mistakes in the financial statements under the assumption that their impact is not significant,is the definition of which of the following earnings management techniques?

Conventionally accountants measure income

Which of the following is not a concept of income identified by Bedford?

Which of the following is an argument against using historical cost in accounting?

Discuss the difference between financial capital maintenance and physical capital maintenance.

Discuss the differences between the economic and accounting concepts of income.

Which of the following is not a criteria outlined in SEC Staff Accounting Bulletin No.101 for the recognition of revenue?

The Development of Accounting Theory

The Pursuit of the Conceptual Framework

International Accounting

Research Methodology and Theories on the Uses of Accounting Information

Financial Statement I: the Income Statement

Financial Statements Ii: the Balance Sheet and the Statement of Cash Flows

Working Capital

Long-Term Assets I: Property, Plant, and Equipment

Long-Term Assets Ii: Investments and Intangibles

Long-Term Liabilities

Accounting for Income Taxes

Leases

Pensions and Other Postretirement Benefits

Equity

Accounting for Multiple Entities

Financial Reporting Disclosure Requirement and Ethical Responsibilities

Filters

Exam 5: Income Concepts

Uncertainty and risks inherent in business situations should be adequately considered in financial reporting.This statement is an example of the concept of

Discuss the four types of income defined by Edwards and Bell.

The term revenue recognition conventionally refers to

Discuss the matching concept.

Under what condition is it proper to recognize revenues prior to the sale of the merchandise?

The definition of the economic concept of income is usually attributed to which of the following economists?

Determining periodic earnings and financial position depends on measuring economic resources and obligations and changes in them as these changes occur.This explanation pertains to

The installment method of recognizing revenue is not acceptable for financial reporting if

Overstating sales returns or warranty costs in good times and using these overstatements in bad times to reduce similar charges,is the definition of which of the following earnings management techniques?

Each asset-inventory,plant,equipment,and so on-would be valued based on the selling price that would be realized if the firm chose to dispose of it is the definition of which of the following current value concepts?

Which of the following is not an approach to determining current value?

Which of the following accounting theorists called of conservatism the most influential principle of valuation in accounting?

The cost to replace assets with similar assets in a similar condition is the definition of which of the following current value concepts?

Deliberately recording errors or ignoring mistakes in the financial statements under the assumption that their impact is not significant,is the definition of which of the following earnings management techniques?

Conventionally accountants measure income

Which of the following is not a concept of income identified by Bedford?

Which of the following is an argument against using historical cost in accounting?

Discuss the difference between financial capital maintenance and physical capital maintenance.

Discuss the differences between the economic and accounting concepts of income.

Which of the following is not a criteria outlined in SEC Staff Accounting Bulletin No.101 for the recognition of revenue?

The Development of Accounting Theory

The Pursuit of the Conceptual Framework

International Accounting

Research Methodology and Theories on the Uses of Accounting Information

Financial Statement I: the Income Statement

Financial Statements Ii: the Balance Sheet and the Statement of Cash Flows

Working Capital

Long-Term Assets I: Property, Plant, and Equipment

Long-Term Assets Ii: Investments and Intangibles

Long-Term Liabilities

Accounting for Income Taxes

Leases

Pensions and Other Postretirement Benefits

Equity

Accounting for Multiple Entities

Financial Reporting Disclosure Requirement and Ethical Responsibilities

Filters