Professional Documents
Culture Documents
1. Understandability
2. Reliability, neutrality, prudence
3. Reliability, faithful representation, completeness
4. Completeness, relevance, comparability
5. Reliability
6. Completeness, relevance
7. Understandability
8. Relevance, timeliness
1. Correct
2. Incorrect, no particular presentation requirements are discussed in the Framework.
3. Correct
4. Incorrect, understandability is not an excuse to omit complex information in the
financial statements. Users are expected to possess basic business knowledge and to
exercise diligence.
5. Correct
6. Correct
7. Incorrect, expenses do not involve transactions with owners.
8. Incorrect, an entity shall not leave its accounting policy unchanged if management
assesses that another method of accounting will more relevantly and reliably present
enterprise performance and financial position.
9. Incorrect, understandability depends on two factors: the quality of the information
and the characteristics of the users.
10. Incorrect, an information loses its relevance if it is not communicated early enough
for decision making needs of the users.
11. Correct
12. Incorrect, there is no standard form for the presentation of financial statements; the
management prepares the financial statements using form that will best communicate
to users the enterprises financial position, performance and other changes in financial
position.
13. Incorrect, the main objective of consistency is to present actual similarities and
differences between reporting periods and between enterprises, and not to smooth
profit.
14. Incorrect, the financial capital concept does not limit the measurement basis of
financial statement elements to only one type.
15. Correct
1
Chapter 1 Framework for the Presentation of Financial Statements
Multiple Choice
MC1 B MC21 C
MC2 D MC22 C
MC3 C MC23 A
MC4 A MC24 B
MC5 B MC25 A
MC6 C MC26 B
MC7 A MC27 B
MC8 B MC28 C
MC9 C MC29 A
MC10 A MC30 C
MC11 C MC31 B
MC12 C MC32 A
MC13 A MC33 D
MC14 D MC34 D
MC15 D MC35 D
MC16 C MC36 B
MC17 A MC37 B
MC18 B MC38 B
MC19 B MC39 C
MC20 A MC40 B