Question 1

Identify the element, and whether it is point-in-time or period-of-time.

Accepted Answer

The answer of Identify the element, and whether it is...

Question 2

Which of the following is not considered to be a primary user of financial information for which financial reporting standards are designed?

Accepted Answer

A)  creditors that are suppliers 
B)  investors such as stockholders and bondholders 
C)  regulators 
D)  lenders such as banks 
A)  creditors that are suppliers 
B)  investors such as stockholders and bondholders 
C)  regulators 
D)  lenders such as banks

Question 3

IFRS explicitly addresses the going concern concept.

Accepted Answer

A) True 
 B)False

Question 4

According to IFRS, point-in-time elements include assets, liabilities, and equity.

Accepted Answer

A) True 
 B)False

Question 5

Are the identified measurement bases consistent with fair value reporting?

Accepted Answer

A)  $$\begin{array} { | c | c | } 
\hline \text { Current market value } & \text { Net realizable value } \
\hline \text { Yes } & \text { No } \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | c | } 
\hline \text { Current market value } & \text { Net realizable value } \
\hline \text { No } & \text { No } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | c | } 
\hline \text { Current market value } & \text { Net realizable value } \
\hline \text { Yes } & \text { Yes } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | c | } 
\hline \text { Current market value } & \text { Net realizable value } \
\hline \text { No } & \text { Yes } \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | c | } 
\hline \text { Current market value } & \text { Net realizable value } \
\hline \text { Yes } & \text { No } \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | c | } 
\hline \text { Current market value } & \text { Net realizable value } \
\hline \text { No } & \text { No } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | c | } 
\hline \text { Current market value } & \text { Net realizable value } \
\hline \text { Yes } & \text { Yes } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | c | } 
\hline \text { Current market value } & \text { Net realizable value } \
\hline \text { No } & \text { Yes } \
\hline
\end{array}$$

Question 6

IFRS and U.S. GAAP both identify assets as ________ elements.

Accepted Answer

A)  phase-in-time 
B)  period-of-time 
C)  point-in-time 
D)  piece-of-time 
A)  phase-in-time 
B)  period-of-time 
C)  point-in-time 
D)  piece-of-time

Question 7

The two fundamental characteristics of financial information are ________.

Accepted Answer

A)  comparability and understandability 
B)  relevance and timeliness 
C)  reliability and faithful representation 
D)  faithful representation and relevance 
A)  comparability and understandability 
B)  relevance and timeliness 
C)  reliability and faithful representation 
D)  faithful representation and relevance

Question 8

Southern Light Containers charges $125 per month for a storage unit. In the first quarter of the year, they collected $6,125. Ten customers pre-paid for three months rental in January, seven customers pre-paid for two months rental in February, and five customers paid for one month rental in March. Using the cash basis of accounting, Southern will recognize ________ in revenue for March and ________ using the accrual basis.

Accepted Answer

A)  $0; $3,375 
B)  $625; $0 
C)  $1,250; $2,500 
D)  $625; $2,750 
A)  $0; $3,375 
B)  $625; $0 
C)  $1,250; $2,500 
D)  $625; $2,750

Question 9

At the present time, the FASB and IASB are working together on the conceptual framework.

Accepted Answer

A) True 
 B)False

Question 10

The primary purpose of the conceptual framework is to provide guidance to ________.

Accepted Answer

A)  preparers of financial statements 
B)  auditors 
C)  standard setters 
D)  CEOs 
A)  preparers of financial statements 
B)  auditors 
C)  standard setters 
D)  CEOs

Question 11

The ________ cost is the amount of cash (or equivalent) that a firm paid to acquire an asset, whereas ________ is the amount the firm would pay if the asset were purchased today.

Accepted Answer

A)  historical; current cost 
B)  present value; current market value 
C)  historical; current market value 
D)  realized; present value 
A)  historical; current cost 
B)  present value; current market value 
C)  historical; current market value 
D)  realized; present value

Question 12

IFRS identifies ________ period-in-time elements.

Accepted Answer

A)  four 
B)  five 
C)  six 
D)  seven 
A)  four 
B)  five 
C)  six 
D)  seven

Question 13

Before issuing a new standard, the standard setters weigh constraints, which may deter requiring the new standard.

Accepted Answer

A) True 
 B)False

Question 14

Under IFRS, which of the following is considered to be a measure of current cost?

Accepted Answer

A)  systematic value 
B)  direct cost 
C)  present value of future cash flows 
D)  historical cost 
A)  systematic value 
B)  direct cost 
C)  present value of future cash flows 
D)  historical cost

Question 15

The ________ justifies the use of accrual accounting.

Accepted Answer

A)  historical cost concept 
B)  going concern concept 
C)  monetary unit assumption 
D)  business entity concept 
A)  historical cost concept 
B)  going concern concept 
C)  monetary unit assumption 
D)  business entity concept

Question 16

Which of the following is a point-in-time element?

Accepted Answer

A)  Income 
B)  Liabilities 
C)  Expenses 
D)  Distributions to owners 
A)  Income 
B)  Liabilities 
C)  Expenses 
D)  Distributions to owners

Question 17

U.S. GAAP identifies ________ point-in-time elements.

Accepted Answer

A)  two 
B)  three 
C)  four 
D)  five 
A)  two 
B)  three 
C)  four 
D)  five

Question 18

________ accounting measures cash receipts and disbursements, leaving out economic activity.

Accepted Answer

A)  Accrual 
B)  Cash-basis 
C)  Cloud 
D)  Historic 
A)  Accrual 
B)  Cash-basis 
C)  Cloud 
D)  Historic

Question 19

The attribute ________ relates to information that is relevant.

Accepted Answer

A)  comparative value 
B)  predictive value 
C)  neutrality 
D)  verifiability 
A)  comparative value 
B)  predictive value 
C)  neutrality 
D)  verifiability

Question 20

What is equity and how does it change during a period of time?

Accepted Answer

Equity is the residual interest in the a

Exam 2: Financial Reporting Theory

Identify the element, and whether it is point-in-time or period-of-time.

Which of the following is not considered to be a primary user of financial information for which financial reporting standards are designed?

IFRS explicitly addresses the going concern concept.

According to IFRS, point-in-time elements include assets, liabilities, and equity.

Are the identified measurement bases consistent with fair value reporting?

IFRS and U.S. GAAP both identify assets as ________ elements.

The two fundamental characteristics of financial information are ________.

At the present time, the FASB and IASB are working together on the conceptual framework.

The primary purpose of the conceptual framework is to provide guidance to ________.

The ________ cost is the amount of cash (or equivalent) that a firm paid to acquire an asset, whereas ________ is the amount the firm would pay if the asset were purchased today.

IFRS identifies ________ period-in-time elements.

Before issuing a new standard, the standard setters weigh constraints, which may deter requiring the new standard.

Under IFRS, which of the following is considered to be a measure of current cost?

The ________ justifies the use of accrual accounting.

Which of the following is a point-in-time element?

U.S. GAAP identifies ________ point-in-time elements.

________ accounting measures cash receipts and disbursements, leaving out economic activity.

The attribute ________ relates to information that is relevant.

What is equity and how does it change during a period of time?

The Financial Reporting Environment

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

Extenssion: Ol Revenue Recognition Previous Standard

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, Cost Allocation

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Leases

Extension: Ol Accounting for Leases Current Standard

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

The Statement of Cash Flows

Filters

The cost is the amount of cash (or equivalent) that a firm paid to acquire an asset, whereas is the amount the firm would pay if the asset were purchased today.