Recent Question

Verifiability and predictive value are two ingredients of reliability. TRUE OR FALSE: 1. Relevance and reliability are the two primary qualities that make accounting information useful for decision making. 2. The idea of consistency does not mean that companies cannot switch from one accounting method to another. 3. Timeliness and neutrality are two ingredients of relevance. 4. Verifiability and predictive value are two ingred ...

Other / Other 26 May 2016

Companies consider only quantitative factors in determining whether an item is material TRUE OR FALSE: 1. One of two assumptions made by the IASB conceptual framework is that the reporting entity is a going concern. 2. The expense recognition principle states that debits must equal credits in each transaction. 3. Revenues are realizable when assets received or held are readily convertible into cash or claims to cash. 4. Suppl ...

Other / Other 26 May 2016

International Accounting Standards Board’s 1. In the International Accounting Standards Board’s (IASB’s) Conceptual Framework, qualitative characteristics a. Are considered either fundamental or enhancing. b. Contribute to the decision-usefulness of financial reporting information. c. Distinguish better information from inferior information for decision-making purposes. d. All of the choices are correct. 2. In ...

Other / Other 26 May 2016

Which of the following best describes the cost-benefit constraint 1. Charging off the cost of a wastebasket with an estimated useful life of 10 years as an expense of the period when purchased is an example of the application of the a. consistency characteristic. b. matching principle. c. materiality constraint. d. historical cost principle. 2. Which of the following statements about materiality is not correct? a. An item must ma ...

Other / Other 26 May 2016

Which of the following is an implication of the going concern assumption 1. The economic entity assumption a. is inapplicable to unincorporated businesses. b. recognizes the legal aspects of business organizations. c. requires periodic income measurement. d. is applicable to all forms of business organizations. 2. Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the a. ec ...

Other / Other 26 May 2016

Briefly explain the five basic assumptions that underlie financial accounting Ex. 1—Basic assumptions. Briefly explain the five basic assumptions that underlie financial accounting. Ex. 2—Revenue recognition. Revenue is generally recognized at the point of sale. There are three exceptions, however. Name the time for each exception, give two qualifications or criteria for the use of each exception, and give an example for ...

Other / Other 26 May 2016

What is the general approach as to when product costs are recognized as expenses 1. Which of the following are the two components of the revenue recognition principle? a. Cash is received and the amount is material. b. It is probable that future economic benefits will flow to the company and it is possible to reliably measure the amount. c. Production is complete and there is an active market for the product. d. Cash is realized or re ...

Other / Other 26 May 2016

Which basic assumption may not be followed when a firm in bankruptcy reports financial results 1. Which basic assumption may not be followed when a firm in bankruptcy reports financial results ? a. Economic entity assumption. b. Going concern assumption. c. Periodicity assumption. d. Monetary unit assumption. 2. Which accounting assumption or principle is being violated if a company provides financial reports in connection with a ...

Other / Other 26 May 2016

Which of the following is an ingredient of relevance 1. What is meant by comparability when discussing financial accounting information? a. Information has predictive or feedback value. b. Information is reasonably free from error. c. Information that is measured and reported in a similar fashion across companies. d. Information is timely. 2. What is meant by consistency when discussing financial accounting information? a. Inform ...

Other / Other 26 May 2016

Affairs of the business distinguished from those of its owners Ex. 1—Accounting concepts—matching. Listed below are several qualitative characteristics, accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application. (Items a through k may be used more than once or not at all.) a. Economic entity assumption g. Expense recognition principle b. Going concern assump ...

Other / Other 26 May 2016