CFAS - Chapter 3: True or False

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1. False Fundamental qualitative characteristics of financial accounting information are either relevant or prudent
2. False An enhancing qualitative characteristic is confirmatory value.
3. False A fundamental qualitative characteristic is understandability.
4. False To be a faithful representation, an information must be predictive and confirmatory
5. False Applying different accounting treatment to similar event from period to period is violation of verifiability
6. False Financial statements users are assumed to have no reasonable knowledge of business and financial accounting matters
7. False Entities consider only qualitative factors in determining whether an item is material
8. False Neutrality and predictive value are Characteristic of relevant information
9. False The tendency to recognize favorable events early is an example of conservatism
10. False The Conceptual Framework focuses primarily on the needs of internal users of financial accounting
11. False Once an accounting method is adopted, it should never be changed
12. True A conceptual framework is a coherent system of interrelated objectives and fundamentals that lead to consistent standards.
13. True An enhancing quality of financial açcounting information is comparability
14. True The idea of consistency does not mean that entities cannot switch from one accounting method to another
15. True The overall objective of financial reporting is to provide information for making economic decisions