The overriding criterion by which accounting information can be judged is that of
A. usefulness for decision making
How do we commonly refer to the group of external users for whom the accounting principles are designed to benefit?
C. both a & b
The most significant current source of generally accepted accounting principles is the
B. FASB
The four qualities that make accounting information useful for decision making are
A. comparability, consistency, relevance and reliability
When information about 2 different enterprises has been prepared and presented in a similar manner, the information exhibits the characteristic of
D. comparability
Accounting information is considered to be relevant when it
D. is capable of making a difference in a decision
The quality of information that gives assurance that it is reasonably free of error and bias and is faithful represetation is
D. reliability
Financial information exhibits the characteristic of consistency when
C. accounting entities give accountable events the same accounting treatment from period to period
Which of the following statements about materiality is the best definition of materiality for accounts?
C. an item is material if it makes a difference in a decision
The four basic principles of accounting are
a. economic entity, going concern, monetary unit, periodicty
b cost benefit, materiality, industry practice, conservatism
c. historical cost, revenue recognition, matching, full disclosure
d. comparability, consistency, relevance and reliability
c. historical cost, revenue recognition, matching, full disclosure
The primary & secondary qualitites of accounting are
a. economic entity, going concern, monetary unit, periodicty
b cost benefit, materiality, industry practice, conservatism
c. historical cost, revenue recognition, matching, full disclosure
d. comparability, consistency, relevance and reliability
d. comparability, consistency, relevance and reliability
The four constraints of accounting are
a. economic entity, going concern, monetary unit, periodicty
b cost benefit, materiality, industry practice, conservatism
c. historical cost, revenue recognition, matching, full disclosure
d. comparability, consistency, relevance and reliability
b cost benefit, materiality, industry practice, conservatism
The four basic assumptions of accounting are
a. economic entity, going concern, monetary unit, periodicty
b cost benefit, materiality, industry practice, conservatism
c. historical cost, revenue recognition, matching, full disclosure
d. comparability, consistency, relevance and reliability
a. economic entity, going concern, monetary unit, periodicty
The cost principle requires that when assets are acquired, they be recorded at
a appraisal value
b. historical cost
c. listed selling price
d. market value
b. historical cost
The revenue recognition principle dictates that revenue should be recognized in the accounting records
D. when it is earned
Which of the following is the correct sequence of steps in the recording process?
A. analyzing, journalizing, posting
What are the elements in a Balance sheet?
a. assets, liabilities, and equity
b. assets, liabilities, capital stock, additional paid-in capital, and retained earnings
c. current assets, non-current assets, current liabilities, non-current liabilities, and stockholders' equity
d. side by side and top bottom
a. assets, liabilities, and equity
The date on a Balance sheet referes to?
B. a specific point in time
The basis for separating assets as current or non-current is conversion to cash within?
B. the operating cycle or one year, whichever is longer
Current assets are ordinarily arranged in what sequence?
B. liquidity sequence
The date on an income statement refers to?
C. a period of time
Which of the following is an acceptable format of presenting the income statement?
C. both a and b
What is the main financial statement issue in regards to cash?
B. classification
What is the main financial statement issue in regards to receivables?
B. valuation
How are receivables to be valued?
C. net realizable value
How are inventories to be valued?
A. lower of cost or market
What is meant by market value in relation to valuing inventories?
C. replacement cost with a ceiling and a floor
What is the ceiling to market value in valuing inventories?
D. sales price minus disposal cost
What is the floor to market value in valuing inventories?
D. sales price minus disposal cost minus normal profit
