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accounting mcq quiz-Environment and Theoretical Structure of Financial Accounting




Question;56. The FASB's conceptual framework's qualitative;characteristics of accounting information include;A. Full disclosure.;B. Relevance.;C. Going concern.;D. Historical cost.;57. The conceptual framework's qualitative;characteristic of relevance includes;A. Predictive value.;B. Verifiability.;C. Completeness.;D. Neutrality.;58. The conceptual framework's qualitative;characteristic of faithful representation includes;A. Predictive value.;B. Neutrality.;C. Confirmatory value.;D. Timeliness.;59. The conceptual framework's recognition and;measurement concepts recognize which of the following as an assumption, rather;than a principle?;A. Going concern.;B. Historical cost.;C. Full disclosure.;D. Realization.;60. The conceptual framework's recognition and;measurement concepts recognize which of the following as a principle, rather;than an assumption?;A. Periodicity.;B. Monetary unit.;C. Conservatism.;D. Full disclosure.;61. Phase A of the new conceptual framework focuses;on;A. Objective and qualitative characteristics.;B. Presentation and disclosure.;C. Recognition and measurement.;D. Elements of financial statements.;62. The primary objective of financial accounting;information is to provide useful information to;A. Management.;B. Capital providers.;C. Regulators.;D. None of the above.;63. SFAC No.5 focuses on;A. Objectives of financial reporting.;B. Qualitative characteristics of accounting information.;C. Recognition and measurement concepts in accounting.;D. Elements of financial statements.;64. The main issue in the debate over accounting for;employee stock options was;A. Which employees should receive options.;B. The amount of compensation expense that a company should recognize.;C. How many options should be granted to key executives.;D. The tax consequences of employee stock options.;65. Net income equals;A. Assets minus liabilities.;B. Revenues minus cost of goods sold.;C. Revenues minus expenses.;D. Cash receipts minus cash payments.;66. Enhancing qualitative characteristics of;accounting information include each of the following except;A. Timeliness.;B. Materiality.;C. Comparability.;D. Verifiability.;67. The enhancing qualitative characteristic of;understandability means that information should be understood by;A. Those who are experts in the interpretation of financial information.;B. Those who have a reasonable understanding of business and economic;activities.;C. Financial analysts.;D. CPAs.;68. Fundamental qualitative characteristics of;accounting information are;A. Relevance and comparability.;B. Comparability and consistency.;C. Faithful representation and relevance.;D. Neutrality and consistency.;69. Enhancing qualitative characteristics of accounting;information include;A. Relevance and comparability.;B. Comparability and timeliness.;C. Understandability and relevance.;D. Neutrality and consistency.;70. Gains are;A. Inflows from selling a product or service to a customer.;B. Increases in equity resulting from transfers of assets to the company;from owners.;C. Increases in equity from peripheral transactions of an entity.;D. None of the above.;71. When there is agreement between a measure or;description and the phenomenon it purports to represent, information possesses;which characteristic?;A. Verifiability.;B. Predictive value.;C. Faithful representation.;D. Timeliness.;72. Surefeet Corporation changed its inventory;valuation method. Which characteristic is jeopardized by this change?;A. Comparability.;B. Representational faithfulness.;C. Consistency.;D. Feedback value.;73. Of the following, the most important objective for;financial reporting is to provide information useful for;A. Making decisions.;B. Determining taxable income.;C. Providing accountability.;D. Increasing future profits.;74. Independent auditors express an opinion on;the;A. Fairness of financial statements.;B. Accuracy of financial statements.;C. Soundness of a company's future.;D. Quality of a company's management.;75. Constraints on qualitative characteristics of;accounting information include;A. Timeliness.;B. Going concern.;C. Neutrality.;D. Materiality.;76. Elements of financial statements do not;include;A. Monetary unit.;B. Investments by owners.;C. Comprehensive income.;D. Losses.;77. According to the conceptual framework;verifiability implies;A. Legal evidence.;B. Logic.;C. Consensus.;D. Legal verdict.;78. Land was acquired in 2011 for a future building;site at a cost of $40,000. The assessed valuation for tax purposes is $27,000;a qualified appraiser placed its value at $48,000, and a recent firm offer for;the land was for a cash payment of $46,000. The land should be reported in the;financial statements at;A. $40,000.;B. $27,000.;C. $46,000.;D. $48,000.;79. Maltec Corporation has started placing its;quarterly financial statements on its web page, thereby reducing by ten days;the time to get information to investors and creditors. The qualitative concept;improved is;A. Comparability.;B. Consistency.;C. Timeliness.;D. Faithful representation.;80. Recognizing expected losses immediately, but;deferring expected gains, is an example of;A. Materiality.;B. Conservatism.;C. Cost effectiveness.;D. Timeliness.;81. Change in equity from nonowner sources is;A. Comprehensive income.;B. Revenues.;C. Expenses.;D. Gains and losses.;82. The assumption that in the absence of contrary;information a business entity will continue indefinitely is the;A. Periodicity assumption.;B. Entity assumption.;C. Going concern assumption.;D. Historical cost assumption.;83. Which of the following Statements of Financial;Accounting Concepts defines the 10 elements of financial statements?;A. SFAC 4;B. SFAC 3;C. SFAC 5;D. SFAC 6;84. The possibility that the capital markets' focus on;periodic profits may tempt a company's management to bend or even break;accounting rules to inflate reported net income is an example of;A. An ethical dilemma.;B. An accounting theory issue.;C. A technical accounting issue.;D. None of the above is correct.;85. One of the elements that many believe;distinguishes a profession from other occupations is the acceptance by its;members of a responsibility for the interests of those it serves, often;articulated in;A. Its conceptual framework.;B. Its code of ethics.;C. Federal laws.;D. State laws.86. Primecoat Corporation could disseminate its annual;financial statements two days earlier if it shifted substantial human resources;from other operations to the annual report project. Management decided the;value of the earlier report was not worth the added commitment of resources.;The concept demonstrated is;A. Timeliness.;B. Materiality.;C. Relevance.;D. Cost effectiveness. 87. Mega Loan Company has very stringent credit;requirements and, accordingly, has negligible losses from uncollectible;accounts. The company's independent accountants did not protest when, contrary;to GAAP, the company recorded bad debt expense only when specific accounts were;determined to be uncollectible, rather than use an allowance for uncollectible;accounts. The concept demonstrated is;A. Comparability.;B. Faithful representation.;C. Cost effectiveness.;D. Materiality. 88. An important argument in support of historical;cost information is;A. Relevance.;B. Predictive quality for future cash flows.;C. Materiality.;D. Verifiability.;89. If a company has gone bankrupt, its financial;statements likely violate;A. The matching principle.;B. The realization principle.;C. The stable monetary unit assumption.;D. The going concern assumption. 90. Revenue should not be recognized until;A. The earnings process is complete and collection is reasonably assured.;B. Contracts have been signed and payment has been received.;C. Work has been performed and customer has been billed.;D. Collection has been made and warrantees have expired. 91. Which of the following is not an identified;valuation technique in GAAP regarding fair value measurement?;A. Cost approach.;B. Market approach.;C. Cost-benefit approach.;D. Income approach. 92. Disclosure notes to a company's financial;statements;A. Are relatively unimportant facts that don't belong in the basic;financial statements.;B. Document the source of financial statement facts, like literary;footnotes.;C. Are an integral part of a company's financial statements.;D. Are irrelevant facts that are immaterial in amount. 93. Which of the following best demonstrates the full;disclosure principle?;A. The multi-step income statement.;B. The auditors' report.;C. The company's tax return.;D. Disclosure notes to financial statements.;94. Four different competent accountants independently;agree on the amount and method of reporting an economic event. The concept;demonstrated is;A. Reliability.;B. Comparability.;C. Completeness.;D. Verifiability. 95. The matching principle is;A. A valuation method.;B. An expense recognition accounting principle.;C. A cash basis reporting principle.;D. An asset classification procedure. 96. To meet the needs of full disclosure, companies;use supplemental information, including;A. Parenthetical comments or modifying comments placed on the face of the;financial statements.;B. Disclosure notes conveying additional insights about company;operations, accounting principles, contractual agreements, and pending;litigation.;C. Supplemental financial statements that report more detailed information;than is shown in the primary financial statements.;D. All of the above are correct.;97. Ford Motor Company purchases services from;suppliers on account and sells its products to distributors on short-term;credit. As a result, do each of these events affect net income faster than they;affect net operating cash flows?;A. Option a;B. Option b;C. Option c;D. Option d;="msonormal">


Paper#41257 | Written in 18-Jul-2015

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