Question 1

The need for information on a timely basis may conflict with cost constraints in some situations.

Accepted Answer

A) True 
 B)False

Question 2

Replacement cost as a measure of asset value is generally more reliable than historical cost.

Accepted Answer

A) True 
 B)False

Question 3

The terms calculation and measurement both refer to the valuation of a real phenomena or attribute.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would be considered a political factor relative to the financial accounting policy function?

Accepted Answer

A)  Auditors 
B)  Inflation 
C)  Taxes 
D)  Price changes

Question 5

What is the policy function performed by bodies such as the FASB and the SEC? List and discuss the three sources of inputs to the policy-making function.

Accepted Answer

The answer of What is the policy function performed by...

Question 6

Which of the following is not a major input into the accounting standard-setting process?

Accepted Answer

A)  Accounting theory 
B)  Political factors 
C)  Geographical constraints 
D)  Economic conditions

Question 7

Which of the following methods of valuing an asset is based on the amount that a firm could acquire by selling the asset?

Accepted Answer

A)  Replacement cost 
B)  Entry value 
C)  Exit value 
D)  Both a and b

Question 8

For which measurement scale must the change in the attribute measured among assigned numbers be equal?

Accepted Answer

A)  Interval scale 
B)  Ratio scale 
C)  Ordinal scale 
D)  Both a and b

Question 9

Which measurement scale indicates an order of preference but not the degree of preference among ranks?

Accepted Answer

A)  Interval scale 
B)  Ratio scale 
C)  Nominal scale 
D)  Ordinal scale

Question 10

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

Accepted Answer

A)  Direct measurement. 
B)  Biased measurement. 
C)  Indirect measurement. 
D)  Prediction measurement.

Question 11

Computations and comparisons of accounting ratios is possible because:

Accepted Answer

A)  The zero point in accounting implies "nothingness" in terms of dollar amount. 
B)  Accounting measures are on an interval scale. 
C)  Assets and liabilities are listed in the order of liquidity in the balance sheet. 
D)  Accounting is a basic classification system.

Question 12

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?

Accepted Answer

A)  Objectivity 
B)  Timeliness 
C)  Cost 
D)  Complexity

Question 13

Objectivity may be defined as the degree of consensus among measurers.

Accepted Answer

A) True 
 B)False

Question 14

Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference among ranks is the same.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Indirect measures are usually preferable to direct measures because they are less costly to obtain.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Identify four qualities that are pertinent to accounting measures.

Accepted Answer

The answer of Identify four qualities that are pertinent to...

Question 19

When a direct assessment measure is used, there is always only one correct measure.

Accepted Answer

A) True 
 B)False

Question 20

The simplest type of measuring system is the nominal scale.

Accepted Answer

A) True 
 B)False

Exam 1: An Introduction to Accounting Theory

The need for information on a timely basis may conflict with cost constraints in some situations.

Replacement cost as a measure of asset value is generally more reliable than historical cost.

The terms calculation and measurement both refer to the valuation of a real phenomena or attribute.

Which of the following would be considered a political factor relative to the financial accounting policy function?

What is the policy function performed by bodies such as the FASB and the SEC? List and discuss the three sources of inputs to the policy-making function.

Which of the following is not a major input into the accounting standard-setting process?

Which of the following methods of valuing an asset is based on the amount that a firm could acquire by selling the asset?

For which measurement scale must the change in the attribute measured among assigned numbers be equal?

Which measurement scale indicates an order of preference but not the degree of preference among ranks?

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

Computations and comparisons of accounting ratios is possible because:

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?

Objectivity may be defined as the degree of consensus among measurers.

Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference among ranks is the same.

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

Indirect measures are usually preferable to direct measures because they are less costly to obtain.

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

Identify four qualities that are pertinent to accounting measures.

When a direct assessment measure is used, there is always only one correct measure.

The simplest type of measuring system is the nominal scale.