References
True / False Difficulty: 1 Easy Learning Objective: 01-05 Explain factors that encourage high-
quality financial reporting.
The purpose of the conceptual framework is to provide a structure and framework for a consistent set of GAAP.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-06 Explain the purpose of the conceptual
framework.
15.
Award: 10.00 points
In the United States, the conceptual framework indicates GAAP when a more specific accounting standard does not apply.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-06 Explain the purpose of the conceptual
framework.
16.
Award: 10.00 points
Materiality can be affected by the dollar amount of an item, the nature of the item, or both.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
17.
Award: 10.00 points
According to the FASB's Statements of Financial Accounting Concepts, conservatism is a desired qualitative characteristic of accounting information.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
18.
Award: 10.00 points
Equity is the residual interest in the assets of an entity that remains after deducting its liabilities.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
19.
Award: 10.00 points
Revenues are inflows or other enhancements of assets of an entity or settlements of its liabilities during a period from delivering or producing goods,
rendering services, or other activities that constitute the entity’s ongoing major or central operations.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
20.
Award: 10.00 points
Gains or losses result, respectively, from the disposition of business assets for greater than, or less than, their book values.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
21.
Award: 10.00 points
Comprehensive income is another term for net income.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
22.
Award: 10.00 points
The FASB's conceptual framework lists relevance and timeliness as the two fundamental qualitative characteristics of decision-useful information.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
23.
Award: 10.00 points
24.
Award: 10.00 points
The monetary unit assumption requires that items in financial statements be measured in a particular monetary unit.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-08 Describe the four basic assumptions
underlying GAAP.
The periodicity assumption requires that present value calculations take into account the number of compounding periods in each year.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-08 Describe the four basic assumptions
underlying GAAP.
25.
Award: 10.00 points
Determining fair value by calculating the present value of future cash flows is a level 1 type of input.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-09 Describe the recognition,
measurement, and disclosure concepts that guide accounting
practice.
26.