Exam 1: Introduction to Financial Reporting

Charging off equipment that cost less than $20 would be an example of the application of:

The Statements of Financial Accounting Concepts are intended to provide the Financial Accounting Standards Board with a common foundation and the basic underlying reasoning on which to consider the merits of various alternative accounting principles.

The going concern assumption does not influence the classification of assets and liabilities.

The cash basis recognizes revenue when cash is received and expenses when cash is paid.

Accountants provide for inflation using which of the following accounting principles?

Web sites are not very useful when performing analysis.

At the time of originally recording a transaction, historical cost also represents the fair market value.

Financial Accounting Concepts establish generally accepted accounting principles.

Many companies are on a 51-52 week fiscal year.

Understating assets and revenues is justified based on:

The assumption that allows accountants to accept some inaccuracy, because of incomplete information about the future, in exchange for more timely reporting is:

An entity usually cannot reasonably account for the profits related to inventory until that inventory is sold in the normal course of business.

Relevance and reliability are two primary qualities that make accounting information useful for decision making.

A loss in value of money is called inflation.