Financial Reporting and Analysis: Using Financial Accounting Information 13th test bank
CHAPTER 1—INTRODUCTION TO FINANCIAL REPORTING
MULTIPLE CHOICE
1. Charging off equipment that cost less than $20 would be an example of the application of:
a.
going concern.
b.
cost.
c.
matching.
d.
materiality.
e.
realization.
ANS: D PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Communication
STA: AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP: Traditional Assumptions of the Accounting Model KEY: Bloom's: Knowledge
NOT: Time: 1 min.
2. The going concern assumption:
a.
is applicable to all financial statements.
b.
primarily involves periodic income measurement.
c.
allows for the statements to be prepared under generally accepted accounting principles.
d.
requires that accounting procedures be the same from period to period.
e.
none of the answers are correct.
ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Communication
STA: AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP: Traditional Assumptions of the Accounting Model KEY: Bloom's: Knowledge
NOT: Time: 1 min.
3. Understating assets and revenues is justified based on:
a.
realization assumption.
b.
matching.
c.
consistency.
d.
realization.
e.
None of the answers are correct.
ANS: E PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Communication
STA: AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP: Traditional Assumptions of the Accounting Model KEY: Bloom's: Knowledge
NOT: Time: 1 min.
4. The assumption that enables us to prepare periodic statements between the time that a business commences operations and the time it goes out of business is:
a.
time period.
b.
business entity.
c.
historical cost.
d.
transaction.
e.
None of the answers are correct.
ANS: A PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Communication
STA: AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP: Traditional Assumptions of the Accounting Model KEY: Bloom's: Knowledge
NOT: Time: 1 min.
5. Valuing assets at their liquidation values is not consistent with:
MULTIPLE CHOICE
1. Charging off equipment that cost less than $20 would be an example of the application of:
a.
going concern.
b.
cost.
c.
matching.
d.
materiality.
e.
realization.
ANS: D PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Communication
STA: AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP: Traditional Assumptions of the Accounting Model KEY: Bloom's: Knowledge
NOT: Time: 1 min.
2. The going concern assumption:
a.
is applicable to all financial statements.
b.
primarily involves periodic income measurement.
c.
allows for the statements to be prepared under generally accepted accounting principles.
d.
requires that accounting procedures be the same from period to period.
e.
none of the answers are correct.
ANS: C PTS: 1 DIF: Difficulty: Moderate
NAT: BUSPROG: Communication
STA: AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP: Traditional Assumptions of the Accounting Model KEY: Bloom's: Knowledge
NOT: Time: 1 min.
3. Understating assets and revenues is justified based on:
a.
realization assumption.
b.
matching.
c.
consistency.
d.
realization.
e.
None of the answers are correct.
ANS: E PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Communication
STA: AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP: Traditional Assumptions of the Accounting Model KEY: Bloom's: Knowledge
NOT: Time: 1 min.
4. The assumption that enables us to prepare periodic statements between the time that a business commences operations and the time it goes out of business is:
a.
time period.
b.
business entity.
c.
historical cost.
d.
transaction.
e.
None of the answers are correct.
ANS: A PTS: 1 DIF: Difficulty: Easy
NAT: BUSPROG: Communication
STA: AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP: Traditional Assumptions of the Accounting Model KEY: Bloom's: Knowledge
NOT: Time: 1 min.
5. Valuing assets at their liquidation values is not consistent with: