Question 1

Use the following information to answer questions 
  
-The total dollar amount of assets to be classified as investments is

Accepted Answer

A) $ 0. 
B) $ 165,000. 
C) $ 525,000. 
D) $400,000. 
A) $ 0. 
B) $ 165,000. 
C) $ 525,000. 
D) $400,000.

Question 2

A current asset is

Accepted Answer

A) the last asset purchased by a business. 
B) an asset that is not currently being used to produce a product or service. 
C) usually found as a separate classification in the statement of income. 
D) expected to be converted to cash or used in the business within a relatively short period of time. 
A) the last asset purchased by a business. 
B) an asset that is not currently being used to produce a product or service. 
C) usually found as a separate classification in the statement of income. 
D) expected to be converted to cash or used in the business within a relatively short period of time.

Question 3

Which of the following is not a main section of the conceptual framework of accounting?

Accepted Answer

A) the objective of financial reporting 
B) the going concern assumption 
C) financial analysis 
D) the elements of financial statements 
A) the objective of financial reporting 
B) the going concern assumption 
C) financial analysis 
D) the elements of financial statements

Question 4

In general, standard setters require that most assets be recorded using historical cost because cost is representationally faithful.

Accepted Answer

A) True 
 B)False

Question 5

Qualitative characteristics help ensure that the information provided in financial statements is useful.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true?

Accepted Answer

A) Two recognition principles are the fair value basis of accounting and the going concern assumption. 
B) The fair value basis of accounting states that all assets and liabilities can be reported at fair value. 
C) Fair values may not always be representationally faithful. 
D) Fair value is fair value in use. 
A) Two recognition principles are the fair value basis of accounting and the going concern assumption. 
B) The fair value basis of accounting states that all assets and liabilities can be reported at fair value. 
C) Fair values may not always be representationally faithful. 
D) Fair value is fair value in use.

Question 7

The groupings on a classified statement of financial position,

Accepted Answer

A) help readers of the financial statements determine whether the company has enough liabilities or debts to pay for its assets. 
B) help readers of the financial statements determine the claims of short-term and long-term creditors on the company`s total assets. 
C) help readers of the financial statements determine the claims of long-term creditors only on the company`s total assets. 
D) are for format purposes only. 
A) help readers of the financial statements determine whether the company has enough liabilities or debts to pay for its assets. 
B) help readers of the financial statements determine the claims of short-term and long-term creditors on the company`s total assets. 
C) help readers of the financial statements determine the claims of long-term creditors only on the company`s total assets. 
D) are for format purposes only.

Question 8

Which of the following is not classified as a current asset?

Accepted Answer

A) supplies 
B) trading investments 
C) a fund to be used to purchase a building within the next year 
D) equipment with an estimated useful life of five years 
A) supplies 
B) trading investments 
C) a fund to be used to purchase a building within the next year 
D) equipment with an estimated useful life of five years

Question 9

Comparability and understandability are examples of enhancing qualitative characteristics.

Accepted Answer

A) True 
 B)False

Question 10

Mortgages and pension liabilities are examples of non-current liabilities.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is not true?

Accepted Answer

A) Comparability means using different accounting principles from year to year within a company. 
B) Faithful representation means information must be neutral, complete, and free from error. 
C) Relevant accounting information must be capable of making a difference in a user's decision. 
D) For accounting information to be relevant, it must have timeliness. 
A) Comparability means using different accounting principles from year to year within a company. 
B) Faithful representation means information must be neutral, complete, and free from error. 
C) Relevant accounting information must be capable of making a difference in a user's decision. 
D) For accounting information to be relevant, it must have timeliness.

Question 12

The conceptual framework of accounting begins with

Accepted Answer

A) qualitative characteristics. 
B) the going concern assumption. 
C) the objective of financing reporting. 
D) elements of financial statements. 
A) qualitative characteristics. 
B) the going concern assumption. 
C) the objective of financing reporting. 
D) elements of financial statements.

Question 13

In order for information to be relevant, it must be reported on a timely basis.

Accepted Answer

A) True 
 B)False

Question 14

The conceptual framework of accounting helps to ensure that

Accepted Answer

A) users with no accounting or business knowledge will understand financial statements. 
B) a rule will be in place for every possible situation. 
C) there are consistent standards prescribing the nature, functions and limits of financial statements. 
D) all countries have their own unique accounting standards. 
A) users with no accounting or business knowledge will understand financial statements. 
B) a rule will be in place for every possible situation. 
C) there are consistent standards prescribing the nature, functions and limits of financial statements. 
D) all countries have their own unique accounting standards.

Question 15

The two fundamental qualitative characteristics are

Accepted Answer

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

Question 16

A useful measure of solvency is the

Accepted Answer

A) current ratio. 
B) price-earnings ratio. 
C) basic earnings per share. 
D) debt to total assets. 
A) current ratio. 
B) price-earnings ratio. 
C) basic earnings per share. 
D) debt to total assets.

Question 17

Basic earnings per share is calculated by dividing

Accepted Answer

A) revenue by weighted average shareholders' equity. 
B) revenue by the weighted average number of common shares. 
C) income available to common shareholders by weighted average shareholders' equity. 
D) income available to common shareholders by the weighted average number of common shares. 
A) revenue by weighted average shareholders' equity. 
B) revenue by the weighted average number of common shares. 
C) income available to common shareholders by weighted average shareholders' equity. 
D) income available to common shareholders by the weighted average number of common shares.

Question 18

Long-lived assets without physical substance are

Accepted Answer

A) listed directly under current assets on the statement of financial position. 
B) not listed on the statement of financial position because they do not have physical substance. 
C) are listed as intangible assets on the statement of financial position. 
D) listed as a long-term investment on the statement of financial position. 
A) listed directly under current assets on the statement of financial position. 
B) not listed on the statement of financial position because they do not have physical substance. 
C) are listed as intangible assets on the statement of financial position. 
D) listed as a long-term investment on the statement of financial position.

Question 19

Current liabilities are expected to be

Accepted Answer

A) converted to cash within one year. 
B) paid within one year. 
C) used in the business within one year. 
D) acquired within one year. 
A) converted to cash within one year. 
B) paid within one year. 
C) used in the business within one year. 
D) acquired within one year.

Question 20

All property, plant and equipment

Accepted Answer

A) have estimated useful lives over which they are expected to generate revenue. 
B) are depreciated over their estimated useful lives. 
C) with finite lives, including land, are depreciated. 
D) contribute to the generation of revenue. 
A) have estimated useful lives over which they are expected to generate revenue. 
B) are depreciated over their estimated useful lives. 
C) with finite lives, including land, are depreciated. 
D) contribute to the generation of revenue.

Use the following information to answer questions -The total dollar amount of assets to be classified as investments is

A current asset is

Which of the following is not a main section of the conceptual framework of accounting?

In general, standard setters require that most assets be recorded using historical cost because cost is representationally faithful.

Qualitative characteristics help ensure that the information provided in financial statements is useful.

Which of the following statements is true?

The groupings on a classified statement of financial position,

Which of the following is not classified as a current asset?

Comparability and understandability are examples of enhancing qualitative characteristics.

Mortgages and pension liabilities are examples of non-current liabilities.

Which of the following statements is not true?

The conceptual framework of accounting begins with

In order for information to be relevant, it must be reported on a timely basis.

The conceptual framework of accounting helps to ensure that

The two fundamental qualitative characteristics are

A useful measure of solvency is the

Basic earnings per share is calculated by dividing

Long-lived assets without physical substance are

Current liabilities are expected to be

All property, plant and equipment

The Purpose and Use of Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 2: A Further Look at Financial Statements

Use the following information to answer questions -The total dollar amount of assets to be classified as investments is

A current asset is

Which of the following is not a main section of the conceptual framework of accounting?

In general, standard setters require that most assets be recorded using historical cost because cost is representationally faithful.

Qualitative characteristics help ensure that the information provided in financial statements is useful.

Which of the following statements is true?

The groupings on a classified statement of financial position,

Which of the following is not classified as a current asset?

Comparability and understandability are examples of enhancing qualitative characteristics.

Mortgages and pension liabilities are examples of non-current liabilities.

Which of the following statements is not true?

The conceptual framework of accounting begins with

In order for information to be relevant, it must be reported on a timely basis.

The conceptual framework of accounting helps to ensure that

The two fundamental qualitative characteristics are

A useful measure of solvency is the

Basic earnings per share is calculated by dividing

Long-lived assets without physical substance are

Current liabilities are expected to be

All property, plant and equipment

The Purpose and Use of Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters