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CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL ACCOUNTING

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Question;S98. Which of;the following basic accounting assumptions is threatened by the existence of;severe inflation in the economy?;a. Monetary;unit assumption.;b. Periodicity;assumption.;c. Going-concern;assumption.;d. Economic;entity assumption.;S99. During the;lifetime of an entity accountants produce financial statements at artificial;points in time in accordance with the concept of;Relevance Periodicity;a. No No;b. Yes No;c. No Yes;d. Yes Yes;100. Under current IFRS;inflation is ignored in accounting due to the;a. economic;entity assumption.;b. going;concern assumption.;c. monetary;unit assumption.;d. periodicity;assumption.;101. 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.;102. Preparation;of consolidated financial statements when a parent-subsidiary relationship;exists is an example of the;a. economic;entity assumption.;b. relevance;characteristic.;c. comparability;characteristic.;d. neutrality;characteristic.;103. During the lifetime of an entity;accountants produce financial statements at arbitrary points in time in;accordance with which basic accounting concept?;a. Cost;constraint;b. Periodicity;assumption;c. Conservation;d. Expense;recognition principle;104. The assumption that a company will not be sold or liquidated in the near;future is known as the;a. economic;entity assumption.;b. monetary;unit assumption.;c. materiality;assumption.;d. none;of these answers are correct.;105. Which of the following is an implication of;the going concern assumption?;a. The;historical cost principle is credible.;b. Depreciation;and amortization policies are justifiable and appropriate.;c. The;current-noncurrent classification of assets and liabilities is justifiable and signifi?cant.;d. All;of these answers are correct.;106. The basic assumptions of accounting used by the International;Accounting StandardsBoard;(IASB) include all of the following except;a.;Going concern.;b.;Periodicity.;c.;Accrual basis.;d.;Materiality.;107. The basic assumptions of accounting used by the International Accounting;Standards Board (IASB) include;a.;Neutrality.;b.;Periodicity.;c.;Understandability.;d.;Materiality.

 

Paper#55032 | Written in 18-Jul-2015

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