Question 1

The first part of the conceptual framework project had to do with establishing which projects?

Accepted Answer

A)  elements 
B)  objectives 
C)  qualitative characteristics 
D)  recognition and measurement 
A)  elements 
B)  objectives 
C)  qualitative characteristics 
D)  recognition and measurement

Question 2

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 3

What is the goal of FASB and IASB in the creation of the conceptual framework?

Accepted Answer

A)  To develop standards that are internally consistent. 
B)  To develop standards that are internationally converged. 
C)  To develop standards that lead to financial reporting that provides clear consistent information to capital providers. 
D)  All of these choices 
A)  To develop standards that are internally consistent. 
B)  To develop standards that are internationally converged. 
C)  To develop standards that lead to financial reporting that provides clear consistent information to capital providers. 
D)  All of these choices

Question 4

What sources of information used by external decision making are directly affected by existing FASB standards?

Accepted Answer

A)  Accounting Policies 
B)  Management Discussion and Analysis 
C)  Economic Statistics 
D)  Letters to Stockholders 
A)  Accounting Policies 
B)  Management Discussion and Analysis 
C)  Economic Statistics 
D)  Letters to Stockholders

Question 5

Following the list below is a series of descriptions of inappropriate accounting procedures.     Required:
Indicate which item (or items) on the list was (were) violated in each description by placing the appropriate letter(s) in the space provided.

Accepted Answer

@#IMG-DLM&_TB6205_00

Question 6

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 7

The tentative FASB and IASB Joint Conceptual Framework is presented below.
Required:
Provide the qualitative characteristic for each lettered box.

Accepted Answer

a.decision usefulness
b.predic

Question 8

Which of the following statements regarding financial flexibility is true?

Accepted Answer

A)  It is the ability of a company to provide a return on investment. 
B)  It is the ability of a company to take effective actions to insure the return of capital to the company. 
C)  It is the ability of a company to take adapt changes in the amounts and timing of cash flows. 
D)  It is the ability of a company to maintain a given level of operations. 
A)  It is the ability of a company to provide a return on investment. 
B)  It is the ability of a company to take effective actions to insure the return of capital to the company. 
C)  It is the ability of a company to take adapt changes in the amounts and timing of cash flows. 
D)  It is the ability of a company to maintain a given level of operations.

Question 9

Using the straight-line method to amortize patents is an application of expense recognition using

Accepted Answer

A)  cause and effect 
B)  a systematic and rational allocation over time 
C)  immediate consumption 
D)  the percentage-of-completion method 
A)  cause and effect 
B)  a systematic and rational allocation over time 
C)  immediate consumption 
D)  the percentage-of-completion method

Question 10

The boards are planning to evaluate various measurement techniques for assets and liabilities in order to satisfy objective and qualitative characteristics. To date nine measurement techniques have been identified.
Required:
List those techniques below. 
1__________________________
2__________________________
3__________________________
4__________________________
5__________________________
6__________________________
7__________________________
8__________________________
9__________________________

Accepted Answer

1.past entry price
2.past exit

Question 11

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 12

FASB's financial reporting model identifies which specific financial statements?

Accepted Answer

A)  Statement of Shareholder's Equity 
B)  Statements of Net Income and Comprehensive Income 
C)  Statement of Financial Position 
D)  All of these choices 
A)  Statement of Shareholder's Equity 
B)  Statements of Net Income and Comprehensive Income 
C)  Statement of Financial Position 
D)  All of these choices

Question 13

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 14

FASB's Statements of Financial Accounting Concepts that are general proclamations. List two proclamations that form the basis of GAAP.

Accepted Answer

-fundamental principles of accounting
-o

Question 15

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 16

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 17

In order to be relevant, accounting information should have

Accepted Answer

A)  timeliness 
B)  verifiability 
C)  confirmatory value 
D)  All of these choices 
A)  timeliness 
B)  verifiability 
C)  confirmatory value 
D)  All of these choices

Question 18

According to the FASB hierarchy of fundamental qualitative characteristics, the two primary qualities making accounting information useful are

Accepted Answer

A)  understandability and decision usefulness 
B)  relevance and faithful representation 
C)  verifiability and neutrality 
D)  predictive value and feedback value 
A)  understandability and decision usefulness 
B)  relevance and faithful representation 
C)  verifiability and neutrality 
D)  predictive value and feedback value

Question 19

Which of the following items is NOT included in FASB's conceptual framework of accounting theory?

Accepted Answer

A)  qualities of useful accounting information 
B)  fundamental principles and assumptions that guide financial accounting and reporting 
C)  objectives of financial reporting 
D)  All of these choices are included in the conceptual framework 
A)  qualities of useful accounting information 
B)  fundamental principles and assumptions that guide financial accounting and reporting 
C)  objectives of financial reporting 
D)  All of these choices are included in the conceptual framework

Question 20

Which fundamental characteristic is an ingredient of faithful representation?

Accepted Answer

A)  predictive value 
B)  confirmatory value 
C)  timeliness 
D)  neutrality 
A)  predictive value 
B)  confirmatory value 
C)  timeliness 
D)  neutrality

Exam 2: Financial Reporting: Its Conceptual Framework

The first part of the conceptual framework project had to do with establishing which projects?

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

What is the goal of FASB and IASB in the creation of the conceptual framework?

What sources of information used by external decision making are directly affected by existing FASB standards?

Following the list below is a series of descriptions of inappropriate accounting procedures. Required: Indicate which item (or items) on the list was (were) violated in each description by placing the appropriate letter(s) in the space provided.

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

The tentative FASB and IASB Joint Conceptual Framework is presented below. Required: Provide the qualitative characteristic for each lettered box.

Which of the following statements regarding financial flexibility is true?

Using the straight-line method to amortize patents is an application of expense recognition using

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

FASB's financial reporting model identifies which specific financial statements?

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

FASB's Statements of Financial Accounting Concepts that are general proclamations. List two proclamations that form the basis of GAAP.

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.

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

In order to be relevant, accounting information should have

According to the FASB hierarchy of fundamental qualitative characteristics, the two primary qualities making accounting information useful are

Which of the following items is NOT included in FASB's conceptual framework of accounting theory?

Which fundamental characteristic is an ingredient of faithful representation?

The Demand for and Supply of Financial Accounting Information

Review of a Companys Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingencies

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Postretirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Time Value of Money Module

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