Fundamental qualitative characteristic of Enhancing qualitative characteristic of

accounting information are: accounting information include:

Comparability, understandability, timeliness

and reliability
Faithful representation and relevance

For information to be useful, the linkage Which of the following situation violates the
between the users and decision made: concept of faithful representation:

Financial statement include an item of

property, plant, and equipment with carrying
understandability amount increased to manage estimate of
market value.

The overall objective of financial reporting is to What provides “the why” an dthe goal and
provide information: purpose of accounting :

This is useful for decision making Objective of financial reporting

Under
Which ofthe
therevised conceptual
following framework,
statements best the
measurement bases include:
describes the cost and benefit constraint:

The benefit of the information must be

greater than the cost of providing it.
Historical cost and current value

What is the accounting concept that justifies Accounting information is concerned when it:
the usage of accruals and deferrals:

Is capable of making difference in decision

Going concern
The term “ revenue recognition” The conceptual framework includes which of the
conventionally refers to: following constraints:

The process of identifying transactions to be Cost

recorded s revenue in an accounting period

The valuation of a promise to receive cash in It is the residual interest in the assets entity after
the future at present value is valid because of all deducting of all liabilities:
the accounting concept of:

equity
Going concern

During period when an entity under the The accounting principle of expense recognition is
direction of a particular management, best demonstrated by:
financial reporting all will directly provide
information about:

Entity performance but not management Associating effort with accomplishment

performance

Allowing entities to estimate rather then According to conceptual framework, verifiability

physically count inventory at an interim implies;
period is an example or trade off between:

consensus
Timeliness and verifiability

The objective of financial reporting in The conceptual framework is intended to

conceptual framework: established:

The objectives and concepts for use in developing

standards of financial accounting and reporting.
is the foundation for the conceptual
framework
Which basic assumption may not followed
when an entity in bankruptcy prepares financial
statements:
Going concern assumption
Which statement is not true about
derecognition:
Derecognition is the removal of a recognition
income or expense from the income
statement.
Proponents of historical cost ordinarily
maintain that in comparison with all other
valuation alternatives for financial reporting,
statements prepared using historical cost or
more;
Verifiable
Which of the following is not an implication of
the going concern assumption:
Amortizing research and development costs
over several periods is justifiable and
appropriate
What is the new definition of an asset under
the revised conceptual framework:
A present economic resource controlled by the
entity as a result of past vent
Which of the following statement about
materiality is not correct:
Materiality is a matter of absolute size (relative
size)
Consolidated financial statement are prepared
when a parent-subsidiary relationship exist:
Economic entity assumption ( under the law,
parent and subsidiary are seperate)
When there is agreement between a measure or
description and the phenomenon it purports to
represent, the information possesses which
characteristic:
Faithful representation
It is an increase in economic benefit during the
accounting period related to n increase in asset
or a decrease in liability that results in increase in
equity:
income
The usefulness of providing information in
financial statements Is subject to the constraint
of:
Cost-benefit
Which is not the purpose of the conceptual Which is not important characteristic of the
framework: financial statements that accountants currently
prepare;

The information in financial statement is

To provide specific guidelines for resolving
expressed in units of money adjusted for
situations not covered by existing accounting
charging purchasing power
standards.

Which of the following accounting concepts The arises in the course of ordinary regular
states that an accounting transaction shall be activities and is reffered to by:
supported by sufficient evidence to allow two or
more qualified individuals to arrive at essentially
similar conclusion; A variety of different names including sales,
fees, interest, dividends, royalties and rent
objectivity

During the lifetime of an entity, accountants Revenue may be recognized;

produce financial statements at arbitrary or
artificial points in time in accordance with AT THE POINT OF SALE
which basis accounting concept: DURING PRODUCTION
AT THE END OF PRODUCTION
Time period assumption ALL OF THE CHOICES MAY BE ACCEPTABLE FOR
REVENUE RECOGNITION.

Financial information axhibits consistency Which statement is not true about

when: derecognition:

Accounting entities give similar the same Derecognition is the removal of a recognized
accounting treatment each period income or expense from the income statement

Which statement of the following statement in Which statements is not an objective of financial
relation to income is true: reporting:

Income encompasses both revenue and gain To provide information on the estimating value
of an entity