Question 1

Accounting for the environment is a difficult area because:

Accepted Answer

A) As a common good it is hard to value the environment. 
B) It is difficult to measure the accounting consequences of environmental issues. 
C) Environmental issues extend beyond the entity boundary. 
D) All of the above. 
A) As a common good it is hard to value the environment. 
B) It is difficult to measure the accounting consequences of environmental issues. 
C) Environmental issues extend beyond the entity boundary. 
D) All of the above. D

Question 2

Which measurement system would seem most relevant to creditors?

Accepted Answer

A) Current cost. 
B) Historic cost. 
C) Fair value. 
D) Deprival value. 
A) Current cost. 
B) Historic cost. 
C) Fair value. 
D) Deprival value. C

Question 3

The statement in relation to current trends in accounting that is NOT correct is:

Accepted Answer

A) The concepts of capital and profit have changed and evolved over time. 
B) There is a movement towards a 'fair value' approach. 
C) There is a movement towards a more traditional approach. 
D) More emphasis is now being placed on the relevance of information rather than its reliability'. 
A) The concepts of capital and profit have changed and evolved over time. 
B) There is a movement towards a 'fair value' approach. 
C) There is a movement towards a more traditional approach. 
D) More emphasis is now being placed on the relevance of information rather than its reliability'. C

Question 4

Which of the following is NOT an argument in favour of exit price accounting?

Accepted Answer

A) Rather than measuring past events the method measures those that might happen if a firm does something other than what was planned. 
B) Valuing all elements in the financial statements at their money equivalents provides one rule that can be applied consistently. 
C) The financial statements are allocation-free. 
D) Exit price accounting involves references to real-world examples therefore it is more grounded in reality than historical cost accounting. 
A) Rather than measuring past events the method measures those that might happen if a firm does something other than what was planned. 
B) Valuing all elements in the financial statements at their money equivalents provides one rule that can be applied consistently. 
C) The financial statements are allocation-free. 
D) Exit price accounting involves references to real-world examples therefore it is more grounded in reality than historical cost accounting.

Question 5

Which measurement system would seem most relevant to investors?

Accepted Answer

A) Current cost. 
B) Historic cost. 
C) Fair value. 
D) Deprival value. 
A) Current cost. 
B) Historic cost. 
C) Fair value. 
D) Deprival value.

Question 6

Which of these is NOT a criticism of historical cost accounting?

Accepted Answer

A) Historical cost overstates profit in times of rising prices. 
B) It is not objective and is open to manipulation. 
C) It has been used by business over many centuries. 
D) Cost information is not always available. 
A) Historical cost overstates profit in times of rising prices. 
B) It is not objective and is open to manipulation. 
C) It has been used by business over many centuries. 
D) Cost information is not always available.

Question 7

Measurement in an accounting context involves:

Accepted Answer

A) Apportioning costs between items. 
B) Determining the quantities of assets held by an entity. 
C) Estimating the amounts to be derived from assets. 
D) All of the above. 
A) Apportioning costs between items. 
B) Determining the quantities of assets held by an entity. 
C) Estimating the amounts to be derived from assets. 
D) All of the above.

Question 8

Information produced using historical cost as the measurement base is considered:

Accepted Answer

A) More comparable. 
B) Less relevant. 
C) Less faithfully represented. 
D) All of the above. 
A) More comparable. 
B) Less relevant. 
C) Less faithfully represented. 
D) All of the above.

Question 9

Information produced using current cost as the measurement base is considered:

Accepted Answer

A) More comparable between different companies. 
B) Less relevant. 
C) Less understandable. 
D) All of the above. 
A) More comparable between different companies. 
B) Less relevant. 
C) Less understandable. 
D) All of the above.

Question 10

Intangible assets have been identified as one of the hardest area to value because:

Accepted Answer

A) It is difficult to measure an asset with no physical substance. 
B) They are one of the most important assets on the balance sheet. 
C) There are too many markets to choose from. 
D) All of the above. 
A) It is difficult to measure an asset with no physical substance. 
B) They are one of the most important assets on the balance sheet. 
C) There are too many markets to choose from. 
D) All of the above.

Question 11

Which of the following is NOT a limitation of measurement in accounting?

Accepted Answer

A) It is impossible to compare entities over a period of time. 
B) There is little agreement on what measurement methods should be used. 
C) Measurement can be quite subjective. 
D) There are some accounting items that are not easily measured. 
A) It is impossible to compare entities over a period of time. 
B) There is little agreement on what measurement methods should be used. 
C) Measurement can be quite subjective. 
D) There are some accounting items that are not easily measured.

Question 12

Which of these is a defence of current cost accounting?

Accepted Answer

A) It specifically recognises future technological changes in profit determination. 
B) It is the most objective of the proposed accounting methods. 
C) Relevant current events of the accounting period should be accounted for to maintain the usefulness of accounting information for decision-making. 
D) All of the above are defences. 
A) It specifically recognises future technological changes in profit determination. 
B) It is the most objective of the proposed accounting methods. 
C) Relevant current events of the accounting period should be accounted for to maintain the usefulness of accounting information for decision-making. 
D) All of the above are defences.

Question 13

Which of the following is NOT a reason measurement is a controversial accounting issue?

Accepted Answer

A) It can affect how entities are perceived. 
B) It can be quite subjective. 
C) It is not a political issue. 
D) It does not lead to consistent recording. 
A) It can affect how entities are perceived. 
B) It can be quite subjective. 
C) It is not a political issue. 
D) It does not lead to consistent recording.

Question 14

An argument against fair value measurement in accounting is:

Accepted Answer

A) It can lead to volatility in earnings. 
B) Market prices are too objective. 
C) It does not allow enough professional judgement. 
D) It reflects the value of the item today. 
A) It can lead to volatility in earnings. 
B) Market prices are too objective. 
C) It does not allow enough professional judgement. 
D) It reflects the value of the item today.

Question 15

Information produced using fair value as the measurement base is considered:

Accepted Answer

A) Less Neutral. 
B) More relevant. 
C) More faithfully represented. 
D) All of the above. 
A) Less Neutral. 
B) More relevant. 
C) More faithfully represented. 
D) All of the above.

Question 16

Under the Conceptual Framework the preferred measurement model is:

Accepted Answer

A) Present Value. 
B) Historical Cost. 
C) Current Cost. 
D) None of the above. 
A) Present Value. 
B) Historical Cost. 
C) Current Cost. 
D) None of the above.

Question 17

The statement that is true with respect to current cost accounting is:

Accepted Answer

A) Current operating profit is the excess of the current value of the output sold over the current cost of the related inputs. 
B) Gains are recorded only when the assets are disposed of. 
C) Holding gains are not included in current operating profits. 
D) None of the above is true. 
A) Current operating profit is the excess of the current value of the output sold over the current cost of the related inputs. 
B) Gains are recorded only when the assets are disposed of. 
C) Holding gains are not included in current operating profits. 
D) None of the above is true.

Question 18

Which of the following is NOT a benefit of measurement in accounting?

Accepted Answer

A) It allows users to assess the performance of the entity. 
B) Dissimilar items can be easily combined into meaningful totals. 
C) It makes information more decision useful. 
D) It allows users to compare entities. 
A) It allows users to assess the performance of the entity. 
B) Dissimilar items can be easily combined into meaningful totals. 
C) It makes information more decision useful. 
D) It allows users to compare entities.

Accounting for the environment is a difficult area because:

Which measurement system would seem most relevant to creditors?

The statement in relation to current trends in accounting that is NOT correct is:

Which of the following is NOT an argument in favour of exit price accounting?

Which measurement system would seem most relevant to investors?

Which of these is NOT a criticism of historical cost accounting?

Measurement in an accounting context involves:

Information produced using historical cost as the measurement base is considered:

Information produced using current cost as the measurement base is considered:

Intangible assets have been identified as one of the hardest area to value because:

Which of the following is NOT a limitation of measurement in accounting?

Which of these is a defence of current cost accounting?

Which of the following is NOT a reason measurement is a controversial accounting issue?

An argument against fair value measurement in accounting is:

Information produced using fair value as the measurement base is considered:

Under the Conceptual Framework the preferred measurement model is:

The statement that is true with respect to current cost accounting is:

Which of the following is NOT a benefit of measurement in accounting?

Contemporary Issues in Accounting

The Conceptual Framework for Financial Reporting

Standard Setting

Theories in Accounting

Products of the Financial Reporting Process

Corporate Governance

Capital Markets Research and Accounting

Earnings Management

Fair Value Accounting

Sustainability and Environmental Accounting

International Accounting

Filters

Exam 4: Measurement

Accounting for the environment is a difficult area because:

Which measurement system would seem most relevant to creditors?

The statement in relation to current trends in accounting that is NOT correct is:

Which of the following is NOT an argument in favour of exit price accounting?

Which measurement system would seem most relevant to investors?

Which of these is NOT a criticism of historical cost accounting?

Measurement in an accounting context involves:

Information produced using historical cost as the measurement base is considered:

Information produced using current cost as the measurement base is considered:

Intangible assets have been identified as one of the hardest area to value because:

Which of the following is NOT a limitation of measurement in accounting?

Which of these is a defence of current cost accounting?

Which of the following is NOT a reason measurement is a controversial accounting issue?

An argument against fair value measurement in accounting is:

Information produced using fair value as the measurement base is considered:

Under the Conceptual Framework the preferred measurement model is:

The statement that is true with respect to current cost accounting is:

Which of the following is NOT a benefit of measurement in accounting?

Contemporary Issues in Accounting

The Conceptual Framework for Financial Reporting

Standard Setting

Theories in Accounting

Products of the Financial Reporting Process

Corporate Governance

Capital Markets Research and Accounting

Earnings Management

Fair Value Accounting

Sustainability and Environmental Accounting

International Accounting

Filters