Question 1

Which of the following is not a required component of financial statements prepared in accordance with generally accepted accounting principles?

Accepted Answer

A)  President's letter to shareholders. 
B)  Statement of financial position. 
C)  Income statement. 
D)  Notes to financial statements. 
A)  President's letter to shareholders. 
B)  Statement of financial position. 
C)  Income statement. 
D)  Notes to financial statements.

Question 2

The overriding criterion by which accounting information can be judged is that of

Accepted Answer

A)  usefulness for decision making. 
B)  freedom from bias. 
C)  timeliness. 
D)  comparability. 
A)  usefulness for decision making. 
B)  freedom from bias. 
C)  timeliness. 
D)  comparability.

Question 3

What is the general approach as to when product costs are recognized as expenses?

Accepted Answer

A)  In the period when the expenses are paid. 
B)  In the period when the expenses are incurred. 
C)  In the period when the vendor invoice is received. 
D)  In the period when the related revenue is recognized. 
A)  In the period when the expenses are paid. 
B)  In the period when the expenses are incurred. 
C)  In the period when the vendor invoice is received. 
D)  In the period when the related revenue is recognized.

Question 4

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics

Accepted Answer

A)  Are considered either fundamental or enhancing. 
B)  Contribute to the decision-usefulness of financial reporting information. 
C)  Distinguish better information from inferior information for decision-making purposes. 
D)  All of the choices are correct. 
A)  Are considered either fundamental or enhancing. 
B)  Contribute to the decision-usefulness of financial reporting information. 
C)  Distinguish better information from inferior information for decision-making purposes. 
D)  All of the choices are correct.

Question 5

What is meant by consistency when discussing financial accounting information?

Accepted Answer

A)  Information presented by a company that applies the same accounting treatment to similar events, from period to period. 
B)  Information is timely. 
C)  Information that is classified, characterized, and presented clearly and concisely. 
D)  Information is verifiable. 
A)  Information presented by a company that applies the same accounting treatment to similar events, from period to period. 
B)  Information is timely. 
C)  Information that is classified, characterized, and presented clearly and concisely. 
D)  Information is verifiable.

Question 6

A conceptual framework is a coherent system of concepts that flow from an objective.

Accepted Answer

A) True 
 B)False

Question 7

Neutrality is an ingredient of which fundamental quality of information?

Accepted Answer

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

Question 8

An implicit assumption of the International Accounting Standards Board's (IASB's) Conceptual Framework is that

Accepted Answer

A)  Information must be decision-useful to all potential users of financial reporting. 
B)  General-purpose financial reporting is the primary source of information for users of financial reporting. 
C)  Users need reasonable knowledge of business and financial accounting matters to understand the information contained in financial statements. 
D)  All of the choices are correct. 
A)  Information must be decision-useful to all potential users of financial reporting. 
B)  General-purpose financial reporting is the primary source of information for users of financial reporting. 
C)  Users need reasonable knowledge of business and financial accounting matters to understand the information contained in financial statements. 
D)  All of the choices are correct.

Question 9

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics are considered either relevant or prudent.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a fundamental quality of useful accounting information?

Accepted Answer

A)  Comparability. 
B)  Relevance. 
C)  Neutrality. 
D)  Materiality. 
A)  Comparability. 
B)  Relevance. 
C)  Neutrality. 
D)  Materiality.

Question 11

The basic assumptions of accounting used by the International Accounting Standards Board (IASB) include all of the following except:

Accepted Answer

A)  Going concern. 
B)  Periodicity. 
C)  Accrual basis. 
D)  Materiality. 
A)  Going concern. 
B)  Periodicity. 
C)  Accrual basis. 
D)  Materiality.

Question 12

The International Accounting Standards Board's (IASB's) Conceptual Framework includes the elements of financial statements.

Accepted Answer

A) True 
 B)False

Question 13

The International Accounting Standards Board has given companies the option of using fair value to report all of the following except:

Accepted Answer

A)  Receivables 
B)  Investments 
C)  Financial liabilities 
D)  All of the choices can be valued at fair value. 
A)  Receivables 
B)  Investments 
C)  Financial liabilities 
D)  All of the choices can be valued at fair value.

Question 14

Materiality is used in all of the following situations of providing financial information, except:

Accepted Answer

A)  where an amount is of relative large size and importance. 
B)  where it would impact the judgment of a reasonable person. 
C)  where it would not make a difference in the actions of decision maker. 
D)  where omission of the information would result in bias. 
A)  where an amount is of relative large size and importance. 
B)  where it would impact the judgment of a reasonable person. 
C)  where it would not make a difference in the actions of decision maker. 
D)  where omission of the information would result in bias.

Question 15

In the International Accounting Standards Board's (IASB's) Conceptual Framework, an ingredient of a fundamental qualitative characteristic is understandability.

Accepted Answer

A) True 
 B)False

Question 16

Under International Financial Reporting Standards (IFRS) product costs are charged off in the immediate period and period costs may be carried into future periods.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a component of the revenue recognition principle?

Accepted Answer

A)  Cash is received and the amount is material. 
B)  Recognition occurs when the performance obligation is satisfied. 
C)  Production is complete and there is an active market for the product. 
D)  Cash is realized or realizable and production is complete. 
A)  Cash is received and the amount is material. 
B)  Recognition occurs when the performance obligation is satisfied. 
C)  Production is complete and there is an active market for the product. 
D)  Cash is realized or realizable and production is complete.

Question 18

Relevance and faithful representation are the two fundamental qualities that make accounting information useful for decision making.

Accepted Answer

A) True 
 B)False

Question 19

The International Accounting Standards Board's (IASB's) Conceptual Framework includes supplementary information.

Accepted Answer

A) True 
 B)False

Question 20

Revenue is recognized in the accounting period in which the performance obligation is satisfied. This statement describes the

Accepted Answer

A)  consistency characteristic. 
B)  expense recognition principle. 
C)  revenue recognition principle. 
D)  relevance characteristic. 
A)  consistency characteristic. 
B)  expense recognition principle. 
C)  revenue recognition principle. 
D)  relevance characteristic.

Which of the following is not a required component of financial statements prepared in accordance with generally accepted accounting principles?

The overriding criterion by which accounting information can be judged is that of

What is the general approach as to when product costs are recognized as expenses?

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics

What is meant by consistency when discussing financial accounting information?

A conceptual framework is a coherent system of concepts that flow from an objective.

Neutrality is an ingredient of which fundamental quality of information?

An implicit assumption of the International Accounting Standards Board's (IASB's) Conceptual Framework is that

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics are considered either relevant or prudent.

Which of the following is a fundamental quality of useful accounting information?

The basic assumptions of accounting used by the International Accounting Standards Board (IASB) include all of the following except:

The International Accounting Standards Board's (IASB's) Conceptual Framework includes the elements of financial statements.

The International Accounting Standards Board has given companies the option of using fair value to report all of the following except:

Materiality is used in all of the following situations of providing financial information, except:

In the International Accounting Standards Board's (IASB's) Conceptual Framework, an ingredient of a fundamental qualitative characteristic is understandability.

Under International Financial Reporting Standards (IFRS) product costs are charged off in the immediate period and period costs may be carried into future periods.

Which of the following is a component of the revenue recognition principle?

Relevance and faithful representation are the two fundamental qualities that make accounting information useful for decision making.

The International Accounting Standards Board's (IASB's) Conceptual Framework includes supplementary information.

Revenue is recognized in the accounting period in which the performance obligation is satisfied. This statement describes the

Financial Reporting and Accounting Standards

The Accounting Information System

Income Statement and Related Information

Statement of Financial Position and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Filters

Exam 2: Conceptual Framework for Financial Reporting

Which of the following is not a required component of financial statements prepared in accordance with generally accepted accounting principles?

The overriding criterion by which accounting information can be judged is that of

What is the general approach as to when product costs are recognized as expenses?

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics

What is meant by consistency when discussing financial accounting information?

A conceptual framework is a coherent system of concepts that flow from an objective.

Neutrality is an ingredient of which fundamental quality of information?

An implicit assumption of the International Accounting Standards Board's (IASB's) Conceptual Framework is that

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics are considered either relevant or prudent.

Which of the following is a fundamental quality of useful accounting information?

The basic assumptions of accounting used by the International Accounting Standards Board (IASB) include all of the following except:

The International Accounting Standards Board's (IASB's) Conceptual Framework includes the elements of financial statements.

The International Accounting Standards Board has given companies the option of using fair value to report all of the following except:

Materiality is used in all of the following situations of providing financial information, except:

In the International Accounting Standards Board's (IASB's) Conceptual Framework, an ingredient of a fundamental qualitative characteristic is understandability.

Under International Financial Reporting Standards (IFRS) product costs are charged off in the immediate period and period costs may be carried into future periods.

Which of the following is a component of the revenue recognition principle?

Relevance and faithful representation are the two fundamental qualities that make accounting information useful for decision making.

The International Accounting Standards Board's (IASB's) Conceptual Framework includes supplementary information.

Revenue is recognized in the accounting period in which the performance obligation is satisfied. This statement describes the

Financial Reporting and Accounting Standards

The Accounting Information System

Income Statement and Related Information

Statement of Financial Position and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Filters