Result of recognizing revenues and expenses that arise from the same transaction.
Cash basis reporting principle.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-09 Describe the recognition,
measurement, and disclosure concepts that guide accounting
practice.
116.
Award: 10.00 points
Which of the following best describes the additional information that companies use to meet the requirements of full disclosure in financial statements?
Supplemental schedules and tables that report more detailed information than is shown in the primary financial statements
Parenthetical comments or modifying comments placed on the face of the financial statements
Disclosure notes conveying additional insights about company operations, accounting principles, contractual agreements, and pending
litigation
Comments on the face of the financial statements, and schedules, tables, and narrative disclosures in notes to the financial statements
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-09 Describe the recognition,
measurement, and disclosure concepts that guide accounting
practice.
117.
Award: 10.00 points
Ford Motor Company purchases services from suppliers on account and sells its products to distributors on short-term credit. As a result, do each of these
events affect net income faster than they affect net operating cash flows?
Purchase Services Sell Products
a. Yes Yes
b. Yes No
c. No Yes
d. No No
Option c
Option a
Option d
Option b
References
Multiple Choice Learning Objective: 01-02
Explain the difference between
cash and accrual accounting.
Difficulty: 3 Hard Learning Objective: 01-09
Describe the recognition,
measurement, and disclosure
concepts that guide accounting
practice.
118.
Award: 10.00 points
The revenue/expense approach emphasizes:
Recognition of revenues.
Recognition of expenses.
The income statement.
All of these answer choices are correct.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-10 Contrast a revenue/expense approach
and an asset/liability approach to accounting standard setting.
119.
Award: 10.00 points
The asset/liability approach emphasizes:
Whether amounts on the balance sheet meet the definitions of assets and liabilities.
A close relation between the balance sheet and the statement of cash flows.
The distinction between net assets and gross assets.
All of these answer choices are correct.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-10 Contrast a revenue/expense approach
and an asset/liability approach to accounting standard setting.
120.
Award: 10.00 points
Under IFRS, the role of the conceptual framework:
Is less important than in U.S. GAAP.
Includes serving as a guide for practitioners when a specific standard does not apply.
Primarily involves guiding standard setters to make sure that standards are consistent with each other.
Has resulted primarily from a convergence with U.S. GAAP.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-11 Discuss the primary differences between
U.S. GAAP and IFRS with respect to the development of
accounting standards and the conceptual framework underlying
accounting standards.
121.
Award: 10.00 points
Under IFRS, the conceptual framework:
Is not designed to provide guidance to standard setters, but rather only to practitioners.
Specifies a set of rules that determine what constitutes a true IFRS standard.
Emphasizes the overarching concept of the financial statements providing a "true and fair representation" of the company.
Is not designed to provide guidance to practitioners, but rather only to standard setters.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-11 Discuss the primary differences between
U.S. GAAP and IFRS with respect to the development of
accounting standards and the conceptual framework underlying
accounting standards.
122.
Award: 10.00 points
Alpaca Corporation had revenues of $290,000 in its first year of operations. The company has not collected on $19,300 of its sales and still owes $25,500
on $75,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $10,500 in salaries. Owners
invested $13,000 in the business and $13,000 was borrowed on a five-year note. The company paid $4,700 in interest that was the amount owed for the