Professional Documents
Culture Documents
Chapter 2
Multiple Choice
1. Which early accounting theorist was among the first to express the view that all changes in the
value of assets and liabilities should be reflected in the financial statements?
a. A. C. Littleton
b. John Canning
c. William Paton
d. DR Scott
Answer c
Answer a
3. Which of the following is not one of DR Scott’s hierarchy of accounting postulates and
principles?
a. Orientation postulate.
b. The principles of truth and fairness.
c. The materiality principle
d. The principles of adaptability and consistency.
Answer c
4. Which of the following organizations published the monograph titled A Tentative Statement of
Accounting Principles Affecting Annual Corporate Reports?
a. SEC
b. AAA
c. AIA
d. NAA
Answer b
5. Which of the following organizations published the monograph titled A Statement of Accounting
Principles?
a. SEC
b. AAA
c. AIA
18
Answer c
6. Who was the author of Accounting Research Study No. 1, The Basic Postulates of Accounting?
a. Robert Sprouse
b. Maurice Moonitz
c. Alvin Jennings\
d. Thomas Hatfield
Answer b
Answer b
Answer c
Answer d
10. Which of the following is considered a constraint by Statement of Financial Accounting Concepts
No. 8?
a. Cost
b. Conservatism
19
c. Timeliness
d. Verifiability
Answer a
11. Under Statement of Financial Accounting Concepts No. 8, which of the following is an ingredient
of the primary quality of relevance?
a. Neutrality
b. Completeness
c. Understandability
d. Verifiability
Answer b
12. Under Statement of Financial Accounting Concepts No. 8, which of the following is an ingredient
of the primary quality of faithful representation?
a. Understandability
b. Verifiability
c. Predictive value
d. Materiality
Answer b
13. Under Statement of Financial Accounting Concepts No. 8, the ability through consensus of
measures to ensure that information represents what it purports to represent is an example of the
concept of
a. Relevance
b. Verifiability
c. Faithful representation
d. Feedback value
Answer c
14. Under Statement of Financial Accounting Concepts No. 8, which of the following relates to both
relevance and reliability?
a. Timeliness
b. Materiality
c. Predictive value
d. Neutrality
Answer a
15. Under Statement of Financial Accounting Concepts No. 8, which of the following is not a
qualitative characteristic associated with faithful representation?
20
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