Acctg Quiz

1.
Comparability of financial information depends on

-Consistency
2. Accordingto the Conceptual Framework, which of the following, is

the underlying assumption relating to financial statements?
-The business is expected to continue in operation for the foreseeable
future
3. In the Conceptual Framework, qualitative characteristics
-All of the choices are correct.
4. All of the following represent costs of providing financial information
except
-Accessing Capital
5. Information about income and expenses is
-Just as important as information about assets and liabilities.
6. The 2018 Conceptual Framework explicitly referred to
I.Prudence
II.Substance over form
III.Stewardship
-I, II and III

7. Which statement is incorrect regarding a reporting entity?
-A reporting entity should be a legal entity.
8. Which statement is incorrect regarding the new criteria for
recognition of the elements of financial statements?
-Both statements are correct.
9. Which statement is correct regarding enhancing qualitative
characteristics?
-All the statements are correct.
10. The settlement of a present obligation usually involves the entity
giving up resources embodying economic benefits in order to satisfy
the claim of the other party. Settlement of a present obligation may
occur in a number of ways, for example, by:
I. Payment of cash.
II. Transfer of other assets.
III. Provision of services.
IV. Replacement of that obligation with another obligation.
V. Conversion of the obligation to equity.
VI. A creditor waiving or forfeiting its rights.
-I, II, III, IV, V and VI
11. Underthis concept, a profit is earned only if the financial (money)

amount of the net assets at the end of the period exceeds the financial
(money) amount of net assets at the beginning of the period, after
excluding any distributions to, and contributions from, owners during
the period.
-FINANCIAL CAPITAL
12. Which statement is incorrect regarding materiality?
-NONE OF THE STATEMENTS ARE CORRECT
13. Which statement relates to comparability?
-Enables users to identify and understand similarities in, and differences
among, items.
14. Which of the following helps users make good decisions?
-Neither statements are helpful.
15. The following measurement bases provide information updated to
reflect conditions at the measurement date, except
-Amortized Cost
16. To be a faithful representation as described in the Conceptual
Framework, information must be all of the following, except:
-Confirmatory
17. Decision makers vary widely in the types of decisions they make,
the methods of decision making they employ, the information they
already possess or can obtain from other sources, and their ability to
process information. Consequently, for information to be useful there
must be a linkage between these users and the decisions they make.
This link is
-Understandability
18. In accordance with the 2018 Conceptual Framework, historical cost

-Provides information derived, at least in part, from the price of the
transaction or other event that gave rise to the item being measured.
19. Which statement is incorrect regarding prudence?
-Prudence allows for understatement of assets, liabilities, income or
expenses.
20. General purpose financial statements
-Are those intended to meet the needs of users who are not in a
position to require an entity to prepare reports tailored to their
particular information needs.
21. Which statement is incorrect regarding concepts of capital?
-A physical concept of capital is adopted by most entities in preparing
their financial statements.
22. Which statement is incorrect regarding the new definition of a
liability?
-Retained the ‘expected flow’ criterion.
23. Which statement is incorrect regarding a liability?
-A decision by the management of an entity to acquire assets in the
future gives rise to a present obligation.
24. Which
statement is incorrect regarding ‘assets’ in accordance with
the Conceptual Framework?
-Assets are required to be measured at fair value.
25. Which statement is incorrect regarding the elements of financial
statements?
-None of the above.
26. Which concept of capital should be adopted by an entity if the
users of financial statements are primarily concerned with the
maintenance of nominal invested capital or the purchasing power of
invested capital?
-Financial Concept
27. Under this concept, a profit is earned only if the physical productive
capacity (or operating capability) of the enterprise (or the resources or
funds needed to achieve that capacity) at the end of the period exceeds
the physical productive capacity at the beginning of the period, after
excluding any distributions to, and contributions from, owners during
the period.
-Physical capital
28. Financial information is capable of making a difference in decisions
-Both statements are correct.
29. Which of the following is the foundation of the Conceptual
Framework?
-The objective of general purpose financial reporting.
30. Theconceptual framework includes a cost-benefit constraint. Which
of the following best describes the cost-benefit constraint?
-The benefits of the information must be greater than the costs of
providing it.

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1.

Comparability of financial information depends on

2. Accordingto the Conceptual Framework, which of the following, is

II.Substance over form

-I, II and III

II. Transfer of other assets.

III. Provision of services.

IV. Replacement of that obligation with another obligation.

V. Conversion of the obligation to equity.

VI. A creditor waiving or forfeiting its rights.

-I, II, III, IV, V and VI

11. Underthis concept, a profit is earned only if the financial (money)

18. In accordance with the 2018 Conceptual Framework, historical cost

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