CFAS (Reviewer)

CFAS (Reviewer)
1. What is the uthoritative status of the conceptual framework?

- In the absence of a standard or an interpretation that specifically applies to a
transaction, management shall consider the applicability of the Conceptual
Framework in developing and applying an accounting policy that results in
information that is relevant and reliable.
2. The objective of financial reporting is based on?

- The objective of 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.
3. Purpose of the Conceptual Framework

- To assist users of financial statements in interpreting the Standards
- To assist prepares of financial statements in developing an accounting policy
when a Standard allows an accounting policy choice
- To assist prepares of financial statements in applying the standards
- To assist the FRSC in developing accounting standards and reviewing existing
standards.
- To assist preparers of financial statements in applying accounting standards and
in dealing with issues not yet covered by GAAP.
- To assist the FRSC in the review and adoption of International Financial
Reporting Standards.
- To assist users of financial statements in interpreting the information contained in
the financial statements.
- To assist auditors in forming an opinion as to whether financial statements
conform with Philippine GAAP.
- To provide information to those interested in the work of the FRSC in the
formulation of PFRS.
● Not to assist the Board of Accountancy in promulgating rules and
regulations affecting the accountancy profession.
4. What is conceptual Framework for Financial Reporting

- A complete, comprehensive and single document promulgated by the
International Accounting Standards Board.
5. Conceptual Framework
- Is a summary of the terms and concepts that underlie the preparation and
presentation of financial statements for external users. It is also an attempt to
provide an overall theoretical foundation for accounting.
- Intended to guide standard-setters, preparers and users of financial information
in the preparation and presentation of statements
- Conceptual Framework
- It is the underlying theory for the development of accounting standards and
revision of previously issued accounting standards. It is also concerned with
general purpose financial statements, including consolidated financial
statements.
● The financial statements are prepared at least Annually and are directed toward the
common needs of a wide range of users.
6. Purpose of Having a Conceptual Framework

- To enable the accountancy profession to solve more quickly emerging practical
problems
- To provide a foundation from which to build more useful financial accounting
standards
- To enhance comparability of financial statements across entities.
7. The Conceptual Framework provides the foundation for Standards that

- Contribute to transparency by enhancing international comparability and
quality of financial information.
- Strengthen accountability of the people entrusted with the economic
resources of the entity.
- Contribute to economic efficiency by helping investors to identify
opportunities and risks across the world.
8. A Conceptual Framework should

- Define the basic objectives, terms and concepts of accounting
● The Conceptual Framework

- should increase users' understanding and confidence in financial reporting
- should be based on fundamental truth derived from the law of nature.
- should allow practical problems to be solved more quickly.
9. The primary objective of financial reporting is to provide useful information to

- Capital Providers / Financial information users
10. During a period when an entity is under the direction of a particular management,
financial reporting will directly provide information about
- Both entity performance and management performance
11. In the Conceptual Framework for Financial Reporting what provides the "why" of
accounting?
- Objective of financial reporting
12. The primary focus of financial reporting has been on meeting the needs of which of the
following groups?
- Existing and potential investors, lenders and other creditors
13. The Conceptual Framework provides the foundation for Standards that
- Contribute to transparency by enhancing international comparability and quality
of financial information
- Strengthen accountability of management.
- Contribute to economic efficiency by helping investors to identify opportunities
and risks across the world.
14. An objective of financial reporting is to provide

- Information that is useful in assessing cash flow prospects
15. The Conceptual Framework is intended to establish

- The objectives and concepts for use in developing standards of financial
accounting and reporting.
16. The overall objective of financial reporting is to provide information

- That is useful for decision making.
● Conceptual Framework for Financial Reporting

- describes the concepts for general purpose financial reporting
- In case of conflict, the requirements of the IFRS prevail over the Conceptual
Framework.
- It is not an IFRS
17. Which is a purpose of the Conceptual Framework?

- To assist the IASB to develop IFRS based on consistent concepts.
- To assist preparers to develop consistent accounting policy when no Standard
applies to a particular transaction
- To assist all parties to understand and interpret IFRS.
18. What is an objective of financial reporting?

- To provide information that is useful to assess the amount, timing, and
uncertainty of prospective cash receipts
19. Which is an objective of financial reporting?

- To provide information that is useful in making investing and credit decisions.
20. Financial reporting pertains to

- Individual business entities, rather than to industries or an economy as a whole
or to members of society as consumers
● Financial reporting
- shall provide information about entity resources, claims against
those resources and changes in them.
- Financial reporting shall provide information useful in investment,
credit and similar decisions.
- Financial reporting shall provide information useful in assessing
cash flow prospects.
- shall provide information useful in evaluating management
stewardship
21. The underlying theme of the Conceptual Framework is

- Decision usefulness
22. Which qualitative characteristic of financial information requires that information should
not be biased in favor of one group of users to the detriment of others?
- Neutrality
23. Which statement is true in relation to the enhancing qualitative characteristic of

understandability?
- Users have a reasonable knowledge of business and economic activities and
review the information with reasonable diligence
- Users are expected to have significant business knowledge.
- Financial statements shall exclude complex matters
- Financial statements shall be free from material error.
24. Financial information exhibits consistency when

- Accounting entities give similar events the same accounting treatment each
period.
25. An entity issuing the annual financial reports within one month at the end of reporting
period is an example of which enhancing quality of accounting information?
- Timeliness
26. The ingredients of relevant financial information are

- comparability, verifiability, timeliness and understandability.
27. What is meant by comparability when discussing financial accounting information?

- Information is measured and reported in a similar fashion across entities
28. When an entity applies the same accounting treatment to similar events from period to
period, the entity is exhibiting which of the following qualities?
- Consistency
29. For information to be more useful, the linkage between the users and the decisions
made is
- Understandability
30. The economic substance of a transaction shall prevail over the legal form.
- Substance over form
31. The fundamental qualitative characteristics are

- Relevance and faithful representation
32. What is meant by consistency when discussing financial accounting information?

- Information is measured and reported in a similar fashion across points in time.
33. Which concept of accounting holds that, to the maximum extent possible, financial
statements shall be based on arm's length transactions?
34. The financial accounting information is directed toward the common needs of users.
35. The overriding qualitative characteristic of accounting information is

- Decision usefulness
36. Allowing entities to estimate rather than physically count inventory at an interim period is
an example of a tradeoff between
- Timeliness and verifiability
37. the quality of information that enables users to better forecast future operations?
- Relevance
38. Qualitative characteristics

- Are considered either fundamental or enhancing.
- Contribute to the decision-usefulness of financial reporting information.
- Distinguish better information from inferior information for decision-making
purposes.
39. What are qualitative characteristics of financial statements?

- Qualitative characteristics are the attributes that make the information provided in
financial statements useful to users.
40. Accounting information is considered relevant when it

41. Which of the following terms best describes information that influences the economic
decisions of users?
- Relevance
42. Changing the method of inventory valuation should be reported under what quality of
information?
- Comparability
43. The characteristic that is demonstrated when a high degree of consensus can be
secured among independent measures using the same measurement method is
- Verifiability

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CFAS (Reviewer)

1. What is the uthoritative status of the conceptual framework?

2. The objective of financial reporting is based on?

3. Purpose of the Conceptual Framework

4. What is conceptual Framework for Financial Reporting

6. Purpose of Having a Conceptual Framework

7. The Conceptual Framework provides the foundation for Standards that

8. A Conceptual Framework should

● The Conceptual Framework

9. The primary objective of financial reporting is to provide useful information to

14. An objective of financial reporting is to provide

15. The Conceptual Framework is intended to establish

16. The overall objective of financial reporting is to provide information

● Conceptual Framework for Financial Reporting

17. Which is a purpose of the Conceptual Framework?

18. What is an objective of financial reporting?

19. Which is an objective of financial reporting?

20. Financial reporting pertains to

21. The underlying theme of the Conceptual Framework is

23. Which statement is true in relation to the enhancing qualitative characteristic of

24. Financial information exhibits consistency when

26. The ingredients of relevant financial information are

27. What is meant by comparability when discussing financial accounting information?

31. The fundamental qualitative characteristics are

32. What is meant by consistency when discussing financial accounting information?

35. The overriding qualitative characteristic of accounting information is

38. Qualitative characteristics

39. What are qualitative characteristics of financial statements?

40. Accounting information is considered relevant when it

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