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Exam 2: Conceptual Framework for Financial Reporting

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Question 61

Multiple Choice

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A soundly developed conceptual framework of concepts and objectives should

A) increase financial statement users' understanding of and confidence in financial reporting.
B) enhance comparability among companies' financial statements.
C) allow new and emerging practical to be more quickly solved.
D) All of these answer choices are correct.

E) A) and B)
F) A) and D)

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Question 62

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The second level of the conceptual framework includes each of the following except

A) elements.
B) principles.
C) enhancing qualities.
D) fundamental qualities.

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

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Question 63

Multiple Choice

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Under current GAAP, inflation is ignored in accounting due to the

Which of the following relates to both relevance and faithful representation?

According to the FASB's conceptual framework, predictive value is an ingredient of

The calculation of comprehensive income includes which of the following?

If the LIFO inventory method was used last period, it should be used for the current and following periods because of

Which of the following is an ingredient of relevance?

The first level of the conceptual framework identifies the recognition, measurement, and disclosure concepts used in establishing accounting standards.

A soundly developed conceptual framework enables the FASB to issue more useful and consistent pronouncements over time.

Under IFRS, it is mandatory to report property, plant, and equipment at historical cost.

Recognition of expense related to amortization of an intangible asset illustrates which principle of accounting?

The pervasive criterion by which accounting information can be judged is that of

Trade-offs between the characteristics that make information useful may be necessary or beneficial. Issuance of interim financial statements is an example of a trade-off between

Which of the following is not true concerning a conceptual framework in accounting?

Charging off the cost of a wastebasket with an estimated useful life of 10 years as an expense of the period when purchased is an example of the application of the

If the FIFO inventory method was used last period, it should be used for the current and following periods because of

In the first stage of creating conceptual framework, the IASB and the FASB agreed on the objective of financial reporting and a common set of desired _________.

What is the following is a characteristic describing the primary quality of relevance?

Which assumption or principle requires that all information significant enough to affect a decision of reasonably informed users should be reported in the financial statements?