Question 1

Which of the following does not apply to secondary markets?

Accepted Answer

A)  Transactions are important to the efficient allocation of resources in our economy.
B)  New resources are provided when shares of stock are sold by the corporation to the initial owners.
C)  Transactions help to establish market prices for additional shares that may be issued in the future.
D)  Many investors might be unwilling to provide resources to corporations if there is no available mechanism for the future sale of their stocks and bonds to others.E) C) and D)
F) B) and C)

Question 2

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?

Accepted Answer

The answer of Ford Motor Company purchases services from suppliers...

Question 3

The conceptual framework's recognition and measurement concepts recognize which one of the following as an assumption?

Accepted Answer

A)  Going concern.
B)  Historical cost.
C)  Full disclosure.
D)  Realization.E) All of the above
F) A) and B)

Question 4

Under federal securities laws,the SEC has the authority to set accounting standards in the United States.

Accepted Answer

A) True 
 B)False

Question 5

The revenue/expense approach emphasizes:

Accepted Answer

A)  Recognition of revenues.
B)  Recognition of expenses.
C)  The income statement.
D)  All of the above are correct.E) A) and B)
F) B) and D)

Question 6

When a registrant company submits its annual filing to the SEC,it uses:

Accepted Answer

A)  Form 10-A.
B)  Form 10-K.
C)  Form 10-Q.
D)  Form S-1.E) A) and D)
F) None of the above

Question 7

Contrast the asset/liability and revenue/expense approaches to accounting standard setting.

Accepted Answer

Under the revenue/expense approach,we em...

Question 8

A constraint on qualitative characteristics of accounting information is:

Accepted Answer

A)  Timeliness.
B)  Going concern.
C)  Neutrality.
D)  Cost-effectiveness.E) C) and D)
F) B) and D)

Question 9

Identify or define the following term: historical cost.

Accepted Answer

Historical cost-A measurement ...

Question 10

Which of the following Statements of Financial Accounting Concepts defines the 10 elements of financial statements?

Accepted Answer

A)  SFAC 4.
B)  SFAC 3.
C)  SFAC 5.
D)  SFAC 6.E) B) and C)
F) A) and C)

Question 11

Of the following,the most important objective for financial reporting is to provide information useful for:

Accepted Answer

A)  Making decisions.
B)  Determining taxable income.
C)  Providing accountability.
D)  Increasing future profits.E) B) and C)
F) B) and D)

Question 12

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the correct number code for the term.

Accepted Answer

The answer of Listed below are five terms followed by...

Question 13

The purpose of the conceptual framework is to provide a structure and framework for a consistent set of GAAP.

Accepted Answer

A) True 
 B)False

Question 14

Contrast the role of the conceptual framework in U.S.GAAP and IFRS.

Accepted Answer

The conceptual frameworks in U.S.GAAP an...

Question 15

Disclosure notes to a company's financial statements:

Accepted Answer

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.E) A) and B)
F) A) and C)

Question 16

Identify or define the following terms: periodicity,monetary unit.

Accepted Answer

Periodicity-The life of a company can be...

Question 17

Four different competent accountants independently agree on the amount and method of reporting an economic event.The concept demonstrated is:

Accepted Answer

A)  Reliability.
B)  Comparability.
C)  Completeness.
D)  Verifiability.E) A) and B)
F) All of the above

Question 18

In the Norwalk Agreement,the FASB and IASB pledged to:

Accepted Answer

A)  Combine their organizations to form the BUSYB.
B)  Make progress on specific MOU projects.
C)  Achieve convergence by the year 2015.
D)  Remove existing differences between their standards.E) B) and C)
F) A) and B)

Question 19

According to the conceptual framework,verifiability implies:

Accepted Answer

A)  Legal evidence.
B)  Logic.
C)  Consensus.
D)  Legal verdict.E) B) and D)
F) All of the above

Question 20

The monetary unit assumption requires that items in financial statements be measured in a particular monetary unit.

Accepted Answer

A) True 
 B)False

Exam 1: Environment and Theoretical Structure of Financial Accounting

The monetary unit assumption requires that items in financial statements be measured in a particular monetary unit.

Correct AnswerverifiedShow Answer

Identify or define the following terms: periodicity,monetary unit.

Correct AnswerverifiedPeriodicity-The life of a company can be...View AnswerShow Answer

Identify or define the following term: historical cost.

Correct AnswerverifiedHistorical cost-A measurement ...View AnswerShow Answer

Under federal securities laws,the SEC has the authority to set accounting standards in the United States.

Correct AnswerverifiedShow Answer

When a registrant company submits its annual filing to the SEC,it uses:

Correct AnswerverifiedShow Answer

The conceptual framework's recognition and measurement concepts recognize which one of the following as an assumption?

Correct AnswerverifiedShow Answer

According to the conceptual framework,verifiability implies:

Correct AnswerverifiedShow Answer

The purpose of the conceptual framework is to provide a structure and framework for a consistent set of GAAP.

Correct AnswerverifiedShow Answer

A constraint on qualitative characteristics of accounting information is:

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Which of the following does not apply to secondary markets?

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Of the following,the most important objective for financial reporting is to provide information useful for:

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In the Norwalk Agreement,the FASB and IASB pledged to:

Correct AnswerverifiedShow Answer

The revenue/expense approach emphasizes:

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Which of the following Statements of Financial Accounting Concepts defines the 10 elements of financial statements?

Correct AnswerverifiedShow Answer

Contrast the role of the conceptual framework in U.S.GAAP and IFRS.

Correct AnswerverifiedThe conceptual frameworks in U.S.GAAP an...View AnswerShow Answer

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?

Correct AnswerverifiedShow Answer

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the correct number code for the term.

Correct AnswerverifiedShow Answer

Four different competent accountants independently agree on the amount and method of reporting an economic event.The concept demonstrated is:

Correct AnswerverifiedShow Answer

Disclosure notes to a company's financial statements:

Correct AnswerverifiedShow Answer

Contrast the asset/liability and revenue/expense approaches to accounting standard setting.

Correct AnswerverifiedUnder the revenue/expense approach,we em...View AnswerShow Answer

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Periodicity-The life of a company can be...
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Historical cost-A measurement ...
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The conceptual frameworks in U.S.GAAP an...
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Under the revenue/expense approach,we em...
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