Questions 3

Question 1

Which of the following characteristics enhances and faithful representation?a. materialityb. timelinessc. predictive valued. neutrality

Answer 1

b. timeliness

Question 2

According to the FASB and IASB conceptual frameworks, certain assets are reported in financial statements at the amount of cash or its equivalent that would have to be paid if the same or equivalent assets were acquire currently. What is the name of the reporting change?a. historical costb. replacement costc. current market valued. net realizable value

Answer 2

b. replacement cost

Question 3

Define replacement cost

Answer 3

the amount of cash or its equivalent that would be paid to acquire or replace an asset currently. It is an aquisition cost

Question 4

Define current market value or fair value

Answer 4

the price to sell (not acquire) an asset

Question 5

Define historical cost

Answer 5

the amount paid by a company to acquire an asset

Question 6

Define net realizable value

Answer 6

the selling price of an asset less any disposal costs

Question 7

According to the FASB and IASB conceptual frameworks, to be relevant, information should have which of the following?a. completenessb. neutralityc. verifiabiltyd. predictive value

Answer 7

d. predictive value

Question 8

According to the FASB and IASB conceptual frameworks, one of the fundamental qualitative characteristics of useful information is a. timelinessb. relevancec. verifiabiltiyd. comparability

Answer 8

b. relevance

Question 9

According to the FASB and IASB conceptual frameworks, neutrality is an ingredient of:a. comparabilityb. relevancec. timelinessd. faithful representation

Answer 9

d. faithful representation

Question 10

According to the FASB and IASB conceptual frameworks, which of the following is an underlying assumption of financial statement preparation and presentation?a. monetary unitb. historical costc. going concernd. periodicity

Answer 10

c. going concern

Question 11

Which of the following is the most authoritative source of US GAAP?a. international financial reporting standardsb. FASB accounting standards codificationc. FASB statements of financial accounting standardsd. FASB statements of financial accounting concepts

Answer 11

b. FASB accounting standards codification

Question 12

Which of the following statements best describes an operating procedure for issuing a new international financial reporting standard?a. an exposure draft is issued after approval by at least nine members of the IASBb. the IASB and IFRIC must jointly approve a new IFRS by majority votec. the IASB issues a required discussion paper as its first publication on the new topicsd. exposure draft are only released to selected interested parties?

Answer 12

a. an exposure draft is issued after approval by at least nine members of the IASB

Question 13

According to the FASB and IASB conceptual frameworks, which of the following correctly pairs a fundamental qualitative characteristic of useful information with one of its components?a. faith representation and predictive valueb. faithful representation and verifiabilityc. relevance and timelinessd. relevance and materiality

Answer 13

d. relevance and materiality

Question 14

Which of the following characteristics of accounting information primarily allows users of financial statements to generate predictions about organization?a. reliabilityb. relevancec. neutralityd. timeliness

Answer 14

b. relevance

Question 15

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Answer 15

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