問題一覧
1
Which financial statement will provide the information about the financial performance based on accrual accounting?
Statement of Comprehensive Income
2
Accounting information is considered relevant when it
Is capable of making a difference in a decision
3
Which of the following statements about materiality is not correct?
Materiality is a matter of absolute size.
4
It is the residual interest in the assets of the entity after deducting all of the liabilities.
Equity
5
The enhancing quality of understandability means that information should be understood by
Those who have a reasonable understanding of business and economic activities
6
Which is not a purpose of the Revised Conceptual Framework?
To assist regulatory agencies in issuing rules and regulations for a particular industry.
7
Under the Revised Conceptual Framework, what is the recognition principle?
Only items that meet the definition of an asset, liability, equity, income and expense are recognized.
8
Which statement is not true about income and expenses?
Income and expenses are the elements that relate to financial position.
9
What is meant by comparability when discussing financial accounting information
Information is measured and reported in a similar fashion across entities.
10
Generally, revenue from sale of goods is recognized
At the point of sale
11
Which statement is true in relation to the enhancing quality of understandability?
Users have a reasonable knowledge of business and economic activities.
12
It is the process of capturing for inclusion in the statement of financial position or the statement of financial performance an item that meets the definition of an element of the financial statements.
Recognition
13
Which statement is not a specific objective of financial reporting?
To provide information on the liquidation value of an entity.
14
Fundamental qualitative characteristics of accounting information are
Faithful representation and relevance
15
Which of the following is not an acceptable basis for the recognition of expense?
Cash Disbursement
16
The term recognized is synonymous with the term
Realized
17
Conservatism is selecting an accounting alternative that
Has the least favorable impact on equity
18
What is the new definition of an asset under the Revised Conceptual Framework?
A present economic resource controlled by the entity as a result of past event.
19
Which statement is not true about current value measurement?
Fulfillment value is the absolute amount of cash expected for the payment of liability.
20
Which is not a characteristic of an asset under the Revised Conceptual Framework?
Future economic benefit is expected to flow to entity and must be probable or certain.
21
What is the new definition of liability under the Revised Conceptual Framework?
A present obligation of the entity to transfer an economic resource as a result of past event.
22
A cause and effect relationship is implicit in the
Matching Principle
23
Derecognition is the removal of a recognized asset or liability from the statement of financial position and normally occurs when
Under all of these circumstances
24
When should an expenditure be recorded as an asset rather than an expense?
When there is a right that has the potential to produce economic benefit
25
Faithful representation includes
Completeness, free from error and neutrality
26
Which of the following best describes the cost-benefit constraint?
The benefit of the information must be greater than the cost of providing it.
27
A corporation pays its annual property tax bill of approximately $12,000 in one payment each December 28. During the year, the corporation's monthly income statements report Property Tax Expense of $1,000. This is an example of which accounting concept?
None of the above
28
What is the general approach as to when product costs are recognized as expense?
In the period when the related revenue is recognized
29
Recognition of an element is appropriate when information results in
Both relevance and faithful representation
30
Which of the following is an application of the systematic and rational allocation principle?
Sales commission
31
The most common measurement basis is
historical cost
32
What is meant by consistency when discussing financial accounting information?
Information is measured and reported in a similar fashion across points in time.
33
What is the primary distinction between revenue and gain
The nature of the activity that gives rise to the transaction
34
The term income
Includes gain resulting from sale of an asset in an arm's length transaction.
35
Which statement is not true concerning the Conceptual Framework?
The conceptual framework should allow practical problems to be solved more quickly
36
Inflation is ignored in accounting due to
Money measurement assumption
37
The overall objective of financial reporting is to provide information
That is useful for decision making.
38
Which of the following criteria need not be satisfied for a liability to exist?
The obligation is to transfer an economic resource and not the ultimate outflow of economic benefit.
39
Which of the following represents the least desirable choice for the recognition of revenue?
Recognition of revenue when cash is collected
40
Which financial statement will provide the information about the changes in entity's economic resources and claims?
Statement of Financial Position
41
What are the attributes that make information in the financial statements useful to the readers?
Qualitative characteristics of financial information
42
A reporting entity
Is an entity that is required or chooses to prepare financial statements
43
During the lifetime of an entity, accountants produce financial statements at arbitrary or artificial points in time in accordance with which basic accounting concept?
time period assumption
44
The assumption that an entity will not be sold or liquidated in the near future is known as
Going concern assumption
45
The overriding qualitative characteristic of accounting information is
Relevance
46
Recognizing expected losses immediately but deferring expected gains is example of
None of the above
47
The financial information is directed toward the common needs of users and is independent of presumptions about particular needs and desires of specific users.
neutrality
48
Enhancing qualitive characteristics of accountinginformation include
Comparability, understandibility timeliness and verifiability
49
The qualitative characteristic of relevance includes
Predictive value and confirmatory value
50
How many chapters does the Conceptual Framework have?
8
51
Creditors, stockholders and potential investors are what type of users of financial information?
external users
52
When an entity has started placing its quarterly financial statements on its website, thereby reducing ample time to get information to users, the qualitative concept involved is
timeliness
53
Which of the following terms best describes information that influences the economic decisions of users?
Relevant
54
What is the quality of information that enables users to better forecast future operations?
Comparability
55
The Conceptual Framework includes which constraint?
cost
56
Which is not an enhancing characteristic of financial information?
Relevance
57
Current value includes
fair value, value in use, fullfillment value and current cost
58
This is an aspect of relevance based on the magnitude of the items which the information relates in the context of an individual entity's financial report.
materiality
59
Accountants might recognize losses but not gains in certain situations. For example, the company might write-down the cost of inventory, but will not write-up the cost of inventory. Which principle/guideline is associated with this action?
Conservatism
60
Which financial statement will provide the information about the changes in entity's economic resources and claims not resulting from financial performance?
statement of changes in equity
61
A retailer wishes to report its merchandise inventory on its balance sheet at its retail value. This would violate which accounting concept?
historical cost
62
Which financial statement will provide the information about the financial performance based on past cash flows?
statement of cash flows
63
Which assumption justifies the usage of accruals and deferrals?
time period
64
Which accounting concept is associated with the assumption that the company will continue long enough to carry out its objectives and commitments?
going concern
65
Which of the following is not an element of Faithful Representation?
Timeliness