Question 1

The second level of the International Accounting Standards Board's (IASB's) Conceptual Framework

Accepted Answer

A)  provides conceptual building blocks that explain the qualitative characteristics of accounting information. 
B)  defines the elements of financial statements. 
C)  serves as a bridge between the "why" of accounting and the "how" of accounting. 
D)  all of the choices are correct. 
A)  provides conceptual building blocks that explain the qualitative characteristics of accounting information. 
B)  defines the elements of financial statements. 
C)  serves as a bridge between the "why" of accounting and the "how" of accounting. 
D)  all of the choices are correct.

Question 2

The International Accounting Standards Board's (IASB) definition of retained earnings is "the residual interest in the assets of the entity after deducting all its liabilities."

Accepted Answer

A) True 
 B)False

Question 3

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics distinguish better information from inferior information for decision-making purposes.

Accepted Answer

A) True 
 B)False

Question 4

The accounting principle of expense recognition is best demonstrated by

Accepted Answer

A)  not recognizing any expense unless some revenue is realized. 
B)  associating effort (expense) with accomplishment (revenue). 
C)  recognizing prepaid rent received as revenue. 
D)  establishing an Appropriation for Contingencies account. 
A)  not recognizing any expense unless some revenue is realized. 
B)  associating effort (expense) with accomplishment (revenue). 
C)  recognizing prepaid rent received as revenue. 
D)  establishing an Appropriation for Contingencies account.

Question 5

All of the following represent costs of providing financial information except

Accepted Answer

A)  preparing. 
B)  disseminating. 
C)  accessing capital. 
D)  auditing. 
A)  preparing. 
B)  disseminating. 
C)  accessing capital. 
D)  auditing.

Question 6

In the International Accounting Standards Board's (IASB's) Conceptual Framework, a fundamental qualitative characteristic is

Accepted Answer

A)  Materiality. 
B)  Faithful representation. 
C)  Decision usefulness. 
D)  Neutrality. 
A)  Materiality. 
B)  Faithful representation. 
C)  Decision usefulness. 
D)  Neutrality.

Question 7

The periodicity assumption of accounting (used by the International Accounting Standards Board) makes depreciation and amortization policies justifiable and appropriate.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements about materiality is correct?

Accepted Answer

A)  An item must make a difference or it need not be disclosed. 
B)  Materiality is a matter of relative size or importance. 
C)  An item is material if its inclusion or omission would influence or change the judgment of a reasonable person. 
D)  All of these answers are correct. 
A)  An item must make a difference or it need not be disclosed. 
B)  Materiality is a matter of relative size or importance. 
C)  An item is material if its inclusion or omission would influence or change the judgment of a reasonable person. 
D)  All of these answers are correct.

Question 9

A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to issue more useful and consistent pronouncements over time.

Accepted Answer

A) True 
 B)False

Question 10

To be a faithful representation as described by the International Accounting Standards Board's (IASB's) Conceptual Framework, information must be confirmatory.

Accepted Answer

A) True 
 B)False

Question 11

The two fundamental qualities that make accounting information useful for decision making are

Accepted Answer

A)  comparability and timeliness. 
B)  materiality and neutrality. 
C)  relevance and faithful representation. 
D)  faithful representation and comparability. 
A)  comparability and timeliness. 
B)  materiality and neutrality. 
C)  relevance and faithful representation. 
D)  faithful representation and comparability.

Question 12

Supplementary information may include details or amounts that present a different perspective from that adopted in the financial statements.

Accepted Answer

A) True 
 B)False

Question 13

The International Accounting Standards Board's (IASB) conceptual framework includes a cost-benefit constraint. Which of the following is true regarding this constraint?

Accepted Answer

A)  Benefits are more difficult to quantify than costs. 
B)  The IASB seeks input on costs and benefits as part of their due process. 
C)  Benefits to preparers may include access to capital at a lower cost. 
D)  All of the choices are correct. 
A)  Benefits are more difficult to quantify than costs. 
B)  The IASB seeks input on costs and benefits as part of their due process. 
C)  Benefits to preparers may include access to capital at a lower cost. 
D)  All of the choices are correct.

Question 14

A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to quickly solve new and emerging practical problems by referencing basic theory.

Accepted Answer

A) True 
 B)False

Question 15

Revenue should be recognized

Accepted Answer

A)  at the end of production. 
B)  at the time of cash collection. 
C)  when realized. 
D)  when the performance obligation is satisfied. 
A)  at the end of production. 
B)  at the time of cash collection. 
C)  when realized. 
D)  when the performance obligation is satisfied.

Question 16

The International Accounting Standards Board's (IASB) rule for materiality is any item under 5% of net income is considered immaterial.

Accepted Answer

A) True 
 B)False

Question 17

Revenues are recognized in the accounting period in which the performance obligation is satisfied.

Accepted Answer

A) True 
 B)False

Question 18

The International Accounting Standards Board (IASB) defines one of the 5 elements as follows: "the residual interest in the assets of the entity after deducting all its liabilities" Which element matches this description?

Accepted Answer

A)  Retained earnings. 
B)  Income. 
C)  Equity. 
D)  All of the choices match this definition. 
A)  Retained earnings. 
B)  Income. 
C)  Equity. 
D)  All of the choices match this definition.

Question 19

The first level of the conceptual framework identifies the recognition and measurement concepts used in establishing accounting standards.

Accepted Answer

A) True 
 B)False

Question 20

Which assumption or principle requires that all information significant enough to affect a decision of reasonably informed users should be reported in the financial statements?

Accepted Answer

A)  Expense recognition. 
B)  Going concern. 
C)  Historical cost. 
D)  Full disclosure. 
A)  Expense recognition. 
B)  Going concern. 
C)  Historical cost. 
D)  Full disclosure.

The second level of the International Accounting Standards Board's (IASB's) Conceptual Framework

The International Accounting Standards Board's (IASB) definition of retained earnings is "the residual interest in the assets of the entity after deducting all its liabilities."

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics distinguish better information from inferior information for decision-making purposes.

The accounting principle of expense recognition is best demonstrated by

All of the following represent costs of providing financial information except

In the International Accounting Standards Board's (IASB's) Conceptual Framework, a fundamental qualitative characteristic is

The periodicity assumption of accounting (used by the International Accounting Standards Board) makes depreciation and amortization policies justifiable and appropriate.

Which of the following statements about materiality is correct?

A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to issue more useful and consistent pronouncements over time.

To be a faithful representation as described by the International Accounting Standards Board's (IASB's) Conceptual Framework, information must be confirmatory.

The two fundamental qualities that make accounting information useful for decision making are

Supplementary information may include details or amounts that present a different perspective from that adopted in the financial statements.

The International Accounting Standards Board's (IASB) conceptual framework includes a cost-benefit constraint. Which of the following is true regarding this constraint?

A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to quickly solve new and emerging practical problems by referencing basic theory.

Revenue should be recognized

The International Accounting Standards Board's (IASB) rule for materiality is any item under 5% of net income is considered immaterial.

Revenues are recognized in the accounting period in which the performance obligation is satisfied.

The International Accounting Standards Board (IASB) defines one of the 5 elements as follows: "the residual interest in the assets of the entity after deducting all its liabilities" Which element matches this description?

The first level of the conceptual framework identifies the recognition and measurement concepts used in establishing accounting standards.

Which assumption or principle requires that all information significant enough to affect a decision of reasonably informed users should be reported in the financial statements?

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

The second level of the International Accounting Standards Board's (IASB's) Conceptual Framework

The International Accounting Standards Board's (IASB) definition of retained earnings is "the residual interest in the assets of the entity after deducting all its liabilities."

In the International Accounting Standards Board's (IASB's) Conceptual Framework, qualitative characteristics distinguish better information from inferior information for decision-making purposes.

The accounting principle of expense recognition is best demonstrated by

All of the following represent costs of providing financial information except

In the International Accounting Standards Board's (IASB's) Conceptual Framework, a fundamental qualitative characteristic is

The periodicity assumption of accounting (used by the International Accounting Standards Board) makes depreciation and amortization policies justifiable and appropriate.

Which of the following statements about materiality is correct?

A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to issue more useful and consistent pronouncements over time.

To be a faithful representation as described by the International Accounting Standards Board's (IASB's) Conceptual Framework, information must be confirmatory.

The two fundamental qualities that make accounting information useful for decision making are

Supplementary information may include details or amounts that present a different perspective from that adopted in the financial statements.

The International Accounting Standards Board's (IASB) conceptual framework includes a cost-benefit constraint. Which of the following is true regarding this constraint?

A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to quickly solve new and emerging practical problems by referencing basic theory.

Revenue should be recognized

The International Accounting Standards Board's (IASB) rule for materiality is any item under 5% of net income is considered immaterial.

Revenues are recognized in the accounting period in which the performance obligation is satisfied.

The International Accounting Standards Board (IASB) defines one of the 5 elements as follows: "the residual interest in the assets of the entity after deducting all its liabilities" Which element matches this description?

The first level of the conceptual framework identifies the recognition and measurement concepts used in establishing accounting standards.

Which assumption or principle requires that all information significant enough to affect a decision of reasonably informed users should be reported in the financial statements?

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