Question 1

 /  pts
The financial accounting information is directed toward the common needs of users and is
independent of presumptions about particular needs and desired of specific users.
Correct!
  
Neutrality
 

  
Verifiability
 

  
Relevance
 

  
Completeness
 
 
Question
 /  pts
In the event of conflict between the economic substance of a transaction and the legal form,
the economic substance shall prevail.

  
Relevance
 

  
Completeness
 
Correct!
  
Substance over form
 

  
Form over substance
 
 
Question 3
 /  pts
The enhancing qualitative characteristics of financial information are

  
Comparability and understandability
 

  
Comparability, understandability and verifiability
 

  
Verifiability and timeliness
 
Correct!
  
Comparability, understandability, verifiability and timeliness
 
 
Question 4
 /  pts
Financial information exhibits consistency when

  
Accounting procedures are adopted which smooth net income and make results consistent
between years.
 
Correct!
  
Accounting entities give similar events the same accounting treatment each period.
 

  
Expenditures are reported as expenses.
 

  
Gains and losses are shown separately on the income statement.
 
 
Question 5
 /  pts
When information about two different entities engaged in the same industry has been
prepared and presented in similar manner, the information exhibits the enhancing
qualitative characteristic of

  
Relevance
 

  
Consistency
 

  
Faithful representation
 
Correct!
  
Comparability
 
 
Question 6
 /  pts
The characteristic that is demonstrated when a high degree of consensus can be secured
among independent measurers using the same measurement method is 
Correct!
  
Verifiability
 

  
Neutrality
 

  
Understandability
 

  
Relevance
 
 
Question 7
 /  pts
Which concept of accounting holds that, to the maximum extent possible, financial
statements shall be based on arm's length transactions?

  
Revenue realization
 
Correct!
  
Verifiability
 

  
Monetary unit
 

  
Matching
 
 
Question 8
 /  pts
An entity issuing the annual financial reports within one month after the end of reporting is
an example of which enhancing quality of accounting information?

  
Neutrality
 
Correct!
  
Timeliness
 

  
Predictive value
 

  
Representational faithfulness
 
 
Question 9
0 /  pts
Allowing entities to estimate rather than physically count inventory at the interim periods
is an example of a tradeoff between

  
Verifiability and comparability
 
You Answered
  
Neutrality and consistency
 

  
Timeliness and comparability
 
Correct Answer
  
Timeliness and verifiability
 
 
Question 10
 /  pts
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?

  
Relevance
 

  
Completeness
 
Correct!
  
Neutrality
 

  
Free from error