Confirmatory value.
Predictive value.
Timeliness.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
71.
Award: 10.00 points
SFAC No.5 focuses on:
Elements of financial statements.
Qualitative characteristics of accounting information.
Objectives of financial reporting.
Recognition and measurement concepts in accounting.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-06 Explain the purpose of the conceptual
framework.
72.
Award: 10.00 points
The main issue in the debate over accounting for employee stock options was:
Which employees should receive options.
The amount of compensation expense that a company should recognize.
The tax consequences of employee stock options.
How many options should be granted to key executives.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-04 Explain why establishing accounting
standards is characterized as a political process.
73.
Award: 10.00 points
Confirmatory value is central to the concept of “earnings quality” because it:
Helps investors predict a company’s future cash flows.
Helps investors predict a company’s future earnings.
Allows investors to compare the performance of a company over time.
Allows investors to verify or change their prior assessments of a company’s performance.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
74.
Award: 10.00 points
A firm's comprehensive income always:
Is greater than its net income.
Is the same as its net income.
Is less than its net income.
Could be greater than or less than net income.
References
Multiple Choice Learning Objective: 01-02
Explain the difference between
cash and accrual accounting.
Difficulty: 1 Easy Learning Objective: 01-07
Identify the objective and
qualitative characteristics of
financial reporting information
and the elements of financial
statements.
75.
Award: 10.00 points
Net income equals:
Revenues minus expenses.
Revenues minus cost of goods sold.
Assets minus liabilities.
Cash receipts minus cash payments.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
76.
Award: 10.00 points
Enhancing qualitative characteristics of accounting information include each of the following except:
Comparability.
Materiality.
Timeliness.
Verifiability.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
77.
Award: 10.00 points
The enhancing qualitative characteristic of understandability means that information should be understood by:
Those who are experts in the interpretation of financial information.
CPAs.
Those who have a reasonable understanding of business and economic activities.
Financial analysts.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
78.
Award: 10.00 points
Fundamental qualitative characteristics of accounting information are:
Neutrality and consistency.
Relevance and comparability.
Comparability and consistency.
Faithful representation and relevance.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-07 Identify the objective and qualitative
characteristics of financial reporting information and the elements
of financial statements.
79.
Award: 10.00 points
Enhancing qualitative characteristics of accounting information include:
Relevance and comparability.
Comparability and timeliness.
Understandability and relevance.
Neutrality and consistency.