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ACCCOB2 Quiz 1 > Intro to Financial Accounting > Flashcards

Intro to Financial Accounting Flashcards

1
Q

It is a fundamental qualitative characteristic of a financial information which enables it to influence the decision of financial statement users.

A

Relevance

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2
Q

The non-inclusion of such information could change the decision of a financial statement user on the basis of the financial information of a specific entity.

A

Material

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3
Q

It refers to the impartiality in the selection or presentation of financial information

A

Neutrality

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4
Q

It is a fundamental qualitative characteristic of a financial information which states that the information should be complete, natural, and free from material mistakes.

A

Faithful Representation

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5
Q

It is a qualitative characteristic that allows users to compare and contrast items presented in a financial information, whether from the same entity at different periods or with different entities in the same period.

A

Comparability

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6
Q

Refers to the application of the same procedures for the same items, either from across periods within a reporting entity or in a single period among different reporting entities.

A

Consistency

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7
Q

Different informed and independent observers would reach the same conclusion, although not necessarily complete agreement, that a particular financial information is faithfully presented

A

Verifiability

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8
Q

Having available information to decision makers just in time to allow them to make their decisions

A

Timeliness

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9
Q

Classifying, characterising, and presenting information plainly and succinctly

A

Understandability

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10
Q

Assumes that the entity has neither the intention nor the need to liquidate or reduce materially the scale of its operations

A

Going concern

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11
Q

A present economic resource controlled by the entity as a result of past events

A

Asset

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12
Q

A present obligation of the entity to transfer an economic resource as a result of past events.

A

Liability

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13
Q

Residual interest in the assets of the entity after deducting all its liabilities.

A

Equity

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14
Q

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.

A

Income

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15
Q

Decreases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.

A

Expenses

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16
Q

Process of incorporating on the statement of financial position or profit or loss statement an item that meets the definition of an element

A

Recognition

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17
Q

Process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried on the statement of financial position and profit or loss statement

A

Measurement

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18
Q

Amount of cash or cash equivalents given or the fair value of the asset exchanged to obtain an item at the time of its acquisition

A

Historical Cost

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19
Q

Amount of cash or cash equivalents that would have to be paid if the same or an equivalent asset is acquired currently

A

Current cost

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20
Q

Amount of cash or cash equivalents that could currently be received through the sale of an asset in an orderly manner

A

Fair value

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21
Q

A particular form of general purpose financial reports that provide information about the reporting entity’s assets, liabilities, equity, income and expenses

A

General-purpose financial statements

22
Q

Standards and interpretations issued by the International Accounting Standards Board

A

International Accounting Standards Board (IABS)

23
Q

They contain information that supplements the information already presented on the face of the financial statements

A

Notes to Financial Statement

24
Q

Items of income and expense that are not recognised in profit or loss as required or permitted by other PFRSs

A

Other comprehensive income

25
Q

Total of income less expenses, excluding the components of other comprehensive income

A

Profit or Loss

26
Q

Change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners

A

Total comprehensive income

27
Q

The financial statement that shows an entity’s assets, liabilities, and equity as of a particular date

A

Statement of Financial Position

28
Q

Shows the entity’s profit or loss, and its components, during a particular period

A

Income Statement

29
Q

The financial statement that shows the changes in the entity’s net assets during a particular period

A

Statement of changes in equity

30
Q

Inflows and outflows of cash equivalents

A

Statement of Cash Flows

31
Q

TRUE OR FALSE: The Conceptual Framework is not a PFRS and hence does not define standards for any particular measurement or disclosure issue.

A

False

32
Q

TRUE OR FALSE: The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity.

A

True

33
Q

TRUE OR FALSE: Financial statements provide all the information that existing and potential investors, lenders and other creditors need.

A

True

34
Q

TRUE OR FALSE: Financial statements show the value of a reporting entity.

A

False

35
Q

TRUE OR FALSE: Focusing on common information needs does not prevent the reporting entity from including additional information that is most useful to a particular subset of primary users.

A

True

36
Q

TRUE OR FALSE: Accrual accounting recognises the effects of transactions and other events and circumstances on a reporting entity’s economic resources and claims in the periods in which those effects occur, even if the resulting cash receipts and payments occur in a different period.

A

True

37
Q

TRUE OR FALSE: If financial information is to be useful, it must be relevant and faithfully represent what it intends to represent.

A

TRUE

38
Q

TRUE OR FALSE: The usefulness of financial information is enhanced if it is comparable, verifiable, timely, and understandable.

A

True

39
Q

TRUE OR FALSE: The fundamental qualitative characteristics of useful financial information are relevance and timeliness.

A

True

40
Q

TRUE OR FALSE: Faithful representation does not mean accurate in all respects.

A

False

41
Q

TRUE OR FALSE: Verifiability helps assure users that information faithfully represents the economic phenomena it intends to represent.

A

True

42
Q

TRUE OR FALSE: Financial statements are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyse the information diligently.

A

True

43
Q

TRUE OR FALSE: In assessing whether an item meets the definition of an asset, liability, or equity, analysis should focus not only on its legal form but also on its underlying substance and economic reality.

A

True

44
Q

TRUE OR FALSE: Physical form is essential to the existence of an asset.

A

False

45
Q

TRUE OR FALSE: Obligations also arise from normal business practice, custom, and a desire to maintain good business relations or act in an equitable manner.

A

True

46
Q

TRUE OR FALSE: A decision by the management of an entity to acquire assets in the future gives rise to a liability.

A

False

47
Q

TRUE OR FALSE: The definition of income encompasses both revenue and gains.

A

True

48
Q

TRUE OR FALSE: The definition of income also includes rent collected in advance. (deferred revenue)

A

False

49
Q

TRUE OR FALSE: The definition of expenses encompasses losses as well as those expenses that arise in the course of the ordinary activities of the entity.

A

True

50
Q

TRUE OR FALSE: When losses are recognised on the profit or loss statement, they are usually displayed separately because knowledge of them is useful for the purpose of making economic decisions.

A

True

ACCCOB2 Quiz 1 (3 decks)

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