FAR 1B

Question 1

According to the conceptual framework, the quality of information that helps users increase the likelihood of correctly forecasting the outcome of past or present events is called:

Answer 1

Predictive Value. Predictive value is the ingredient that helps users increase the likelihood of forecasting the outcome of events.

Question 2

What is the conceptual framework intended to establish?

Answer 2

The objectives and concepts for use in developing standards of financial accounting and reporting.

Question 3

The appropriate basis for determining the fair value of an asset or a liability is

Answer 3

an exit price

Question 4

A firm may not use fair value to measure and report an investment in a subsidiary that is to be

Answer 4

consolidated

Question 5

If a firm changes the valuation approach used to determine fair value, how would the amount of change in fair value resulting from the change in the valuation approach be reported?

Answer 5

As a change in accounting estimate

Question 6

When the fair value of an asset is determined as the amount that currently would be required to replace the service capacity of the asset, which one of the following valuation techniques has been used?

Answer 6

Cost approach.

Question 7

Both amortized cost and fair value may be used to measure and report investments classified as

Answer 7

held-to-maturity

Question 8

Firms which elect to measure financial assets and financial liabilities at fair value are required to make significant additional disclosures in both

Answer 8

interim (quarterly, etc.) and annual financial statements.

Question 9

Under U.S. GAAP the disclosure requirements when fair value measurement is used are differentiated by

Answer 9

items measured at fair value on a recurring basis and items measured at fair value on a non-recurring basis.

Question 10

Which regulation governs the form and content of financial statement disclosures?

Answer 10

Regulation S-X.

Question 11

Even though the SEC delegates the creation of accounting standards to the private sector, the SEC frequently comments on accounting and auditing issues. The main pronouncements published by the SEC are:

Answer 11

Financial Reporting Releases (FRR).

Question 12

_______ is not a required component of the 10-K filing

Answer 12

Product market share