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Exam 1: Environment and Theoretical Structure of Financial Accounting

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Question 31

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The enhancing qualitative characteristic of understandability means that information should be understood by:

A) Those who are experts in the interpretation of financial information.
B) Those who have a reasonable understanding of business and economic activities.
C) Financial analysts.
D) CPAs.

E) B) and C)
F) A) and D)

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Question 32

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Enhancing qualitative characteristics of accounting information include each of the following except:

A) Timeliness.
B) Materiality.
C) Comparability.
D) Verifiability.

E) None of the above
F) B) and C)

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Question 33

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Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the correct number code for the term.

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the correct number code for the term.

Porite Company recognizes revenue in the period in which it records an asset for the related account receivable,rather than in the period in which the account receivable is collected in cash.Porite's practice is an example of:

Under IFRS,the role of the conceptual framework:

The most recent example of the political process at work in standard-setting is the heated debate that occurred on the issue of:

Land was acquired in 2016 for a future building site at a cost of $40,000.The assessed valuation for tax purposes is $27,000,a qualified appraiser placed its value at $48,000,and a recent firm offer for the land was for a cash payment of $46,000.The land should be reported in the financial statements at:

The FASB is currently the public-sector organization responsible for setting accounting standards in the United States.

Gains or losses result,respectively,from the disposition of business assets for greater than,or less than,their book values.

Compute net income for the first year for Tri Fecta.

Revenues are inflows or other enhancements of assets or settlements of liabilities from activities that constitute the entity's ongoing operations.

The Public Reform and Investor Protection Act of 2002 (Sarbanes-Oxley)changed the entity responsible for setting auditing standards in the United States.

Equity is a residual amount representing the owner's interest in the assets of the business.

The FASB issues accounting standards in the form of:

Which of the following is not an identified valuation technique in GAAP regarding fair value measurement?

Change in equity from nonowner sources is:

Revenue should not be recognized until:

Determining fair value by calculating the present value of future cash flows is a level 1 type of input.

Surefeet Corporation changed its inventory valuation method.Which characteristic is jeopardized by this change?