Question 1

Management discussion and analysis would be included in the supplementary information to the financial statements.

Accepted Answer

A) True 
 B)False

Question 2

The rules for accounting are based upon concepts, and principles which broad and subject to an interpretation.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following fundamental qualitative characteristics may have to be sacrificed in order to achieve timeliness?

Accepted Answer

A)  relevance 
B)  verifiability 
C)  comparability 
D)  predictive value 
A)  relevance 
B)  verifiability 
C)  comparability 
D)  predictive value

Question 4

Relevance and faithful representation are the ultimate objectives of accounting information.

Accepted Answer

A) True 
 B)False

Question 5

The IASB and FASB joint boards have identified the primary user groups of financial information as all of the following except

Accepted Answer

A)  equity investors 
B)  labor groups 
C)  lenders 
D)  other creditors capital providers) 
A)  equity investors 
B)  labor groups 
C)  lenders 
D)  other creditors capital providers)

Question 6

Accrual accounting relates the financial effects of a company's transactions

Accepted Answer

A)  so that the costs of nonoperational events are matched to the balance sheet in the period impacted 
B)  to the period in which they occur rather than to when the cash receipts or payment occurs 
C)  so that the revenue impact of every transaction in a period is properly reflected in the income statement 
D)  so that the impact of every transaction is reflected in the statement of cash flows 
A)  so that the costs of nonoperational events are matched to the balance sheet in the period impacted 
B)  to the period in which they occur rather than to when the cash receipts or payment occurs 
C)  so that the revenue impact of every transaction in a period is properly reflected in the income statement 
D)  so that the impact of every transaction is reflected in the statement of cash flows

Question 7

Information about a company helps external users assess the return a company has earned on its economic resources and form expectations about its future performance. In what ways is the information concerning the company's net income, comprehensive income and their components useful to external users?

Accepted Answer

- Evaluating management's perf

Question 8

What is the ultimate objective of accounting information?

Accepted Answer

A)  faithful representation 
B)  decision usefulness 
C)  relevance 
D)  predictive value 
A)  faithful representation 
B)  decision usefulness 
C)  relevance 
D)  predictive value

Question 9

Which of the following are considered enhancing characteristics of accounting information?

Accepted Answer

A)  verifiability and confirmatory value 
B)  predictive value and timeliness 
C)  comparability and consistency 
D)  representational faithfulness and neutrality 
A)  verifiability and confirmatory value 
B)  predictive value and timeliness 
C)  comparability and consistency 
D)  representational faithfulness and neutrality

Question 10

To measure assets, liabilities, revenues, expenses, and other elements of the financial statements with the most relevant and faithful measurement available is the mixed attribute measurement model.

Accepted Answer

A) True 
 B)False

Question 11

Information is communicated to external users by the management of the company. Those users cannot dictate desired financial results to the company.

Accepted Answer

A) True 
 B)False

Question 12

Management's stewardship is to provide information about how a company's cash flows cause changes in the company's resources and claim's.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following types of information was specifically identified by the FASB as being useful in assessing the amounts, timing, and uncertainty of a company's future cash flows?

Accepted Answer

A)  liquidity 
B)  return of investment 
C)  financial capability 
D)  credit standing 
A)  liquidity 
B)  return of investment 
C)  financial capability 
D)  credit standing

Question 14

The IASB and FASB boards have agreed that the objective of general purpose financial reporting is to provide

Accepted Answer

A)  financial information about a company that is useful to investors, lenders and other creditors 
B)  mainly cash flow information about a company that is useful to external users in making decisions in their capacity as capital providers 
C)  financial information about a company that is useful to internal users in making decisions in their capacity as capital custodians 
D)  financial information about a company that is used by government regulators for taxation 
A)  financial information about a company that is useful to investors, lenders and other creditors 
B)  mainly cash flow information about a company that is useful to external users in making decisions in their capacity as capital providers 
C)  financial information about a company that is useful to internal users in making decisions in their capacity as capital custodians 
D)  financial information about a company that is used by government regulators for taxation

Question 15

The Framework of Financial Accounting Theory and Practice is made up based upon several objectives. Provide a brief summary of one of these objectives.

Accepted Answer

Provide financial information about the

Question 16

The use of the historical cost principle is justified because the resulting information has the qualitative characteristics of

Accepted Answer

A)  neutrality and materiality 
B)  neutrality and verifiability 
C)  timeliness and relevance 
D)  verifiability and predictive value 
A)  neutrality and materiality 
B)  neutrality and verifiability 
C)  timeliness and relevance 
D)  verifiability and predictive value

Question 17

How many phases of the FASB / IASB convergence project are there?

Accepted Answer

A)  6 
B)  8 
C)  3 
D)  over 10 
A)  6 
B)  8 
C)  3 
D)  over 10

Question 18

The accounting projects portion of the FASB's conceptual framework project deals with

Accepted Answer

A)  which accounting elements should be reported and how they should be measured 
B)  which accounting elements should be reported and where the information should be reported 
C)  how the accounting elements should be measured and how information should be displayed in financial reports 
D)  when accounting elements should be recognized and how information should be displayed in financial reports 
A)  which accounting elements should be reported and how they should be measured 
B)  which accounting elements should be reported and where the information should be reported 
C)  how the accounting elements should be measured and how information should be displayed in financial reports 
D)  when accounting elements should be recognized and how information should be displayed in financial reports

Question 19

Which one of the following assumptions or principles most logically supports the preparation of a single set of consolidated financial statements that combines the financial information of several wholly owned but separately identifiable businesses?

Accepted Answer

A)  historical cost 
B)  industry practices 
C)  reporting entity 
D)  materiality 
A)  historical cost 
B)  industry practices 
C)  reporting entity 
D)  materiality

Question 20

Which of the following items would most likely be a violation of the materiality constraint?

Accepted Answer

A)  A company did not separately report an unusual gain of $100,000. Its income from operations was $20,000,000. 
B)  A company having reported total assets of $50,000,000 immediately expensed the purchase of 20 pencil sharpeners that have an estimated useful life of three years. 
C)  A $75,000 illegal bribe by an executive of the company to a foreign official was not separately disclosed in the annual report. 
D)  A $2,000 expenditure to improve a building that originally cost $10,000,000 was immediately expensed. 
A)  A company did not separately report an unusual gain of $100,000. Its income from operations was $20,000,000. 
B)  A company having reported total assets of $50,000,000 immediately expensed the purchase of 20 pencil sharpeners that have an estimated useful life of three years. 
C)  A $75,000 illegal bribe by an executive of the company to a foreign official was not separately disclosed in the annual report. 
D)  A $2,000 expenditure to improve a building that originally cost $10,000,000 was immediately expensed.

Exam 2: Financial Reporting: Its Conceptual Framework

Management discussion and analysis would be included in the supplementary information to the financial statements.

The rules for accounting are based upon concepts, and principles which broad and subject to an interpretation.

Which of the following fundamental qualitative characteristics may have to be sacrificed in order to achieve timeliness?

Relevance and faithful representation are the ultimate objectives of accounting information.

The IASB and FASB joint boards have identified the primary user groups of financial information as all of the following except

Accrual accounting relates the financial effects of a company's transactions

What is the ultimate objective of accounting information?

Which of the following are considered enhancing characteristics of accounting information?

To measure assets, liabilities, revenues, expenses, and other elements of the financial statements with the most relevant and faithful measurement available is the mixed attribute measurement model.

Information is communicated to external users by the management of the company. Those users cannot dictate desired financial results to the company.

Management's stewardship is to provide information about how a company's cash flows cause changes in the company's resources and claim's.

Which of the following types of information was specifically identified by the FASB as being useful in assessing the amounts, timing, and uncertainty of a company's future cash flows?

The IASB and FASB boards have agreed that the objective of general purpose financial reporting is to provide

The Framework of Financial Accounting Theory and Practice is made up based upon several objectives. Provide a brief summary of one of these objectives.

The use of the historical cost principle is justified because the resulting information has the qualitative characteristics of

How many phases of the FASB / IASB convergence project are there?

The accounting projects portion of the FASB's conceptual framework project deals with

Which one of the following assumptions or principles most logically supports the preparation of a single set of consolidated financial statements that combines the financial information of several wholly owned but separately identifiable businesses?

Which of the following items would most likely be a violation of the materiality constraint?

The Demand for and Supply of Financial Accounting Information

Review of a Company S Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows Time Value of Money Module

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingent Obligations

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Long-Term Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Post-Retirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Understanding Time Value of Money Formulas and Concepts

Filters