ANS:
| a. | consistency |
| b. | time period |
| c. | realization |
| d. | full disclosure |
| e. | business entity |
| f. | historical cost |
| g. | going concern |
| h. | transaction approach |
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: Comprehension
NOT: Time: 10 min.
2. Listed below are several qualitative characteristics.
Required:
Match the characteristic (or characteristics) that goes with each statement.
| a. | understandability |
| b. | usefulness for decision making |
| c. | relevance |
| d. | reliability |
| e. | predictive |
| f. | feedback value |
| g. | timely |
| h. | verifiable |
| i. | representational faithfulness |
| j. | neutrality |
| k. | comparability |
| l. | materiality |
| m. | benefits of information should exceed its cost |
| 1. | Two constraints included in the hierarchy. | |
| 2. | For this quality, the information needs to have predictive and feedback value and be timely. | |
| 3. | These are the qualitative characteristics that are viewed as having the most importance. | |
| 4. | SFAC No. 2 indicates that to be reliable, the information needs to have these characteristics. | |
| 5. | Interacts with relevance and reliability to contribute to the usefulness of information. | |
| 6. | Two primary qualities that make accounting information useful for decision making. | |
| 7. | For this quality, the information must be verifiable, subject to representational faithfulness, and neutral. | |
| 8. | SFAC No. 2 indicates that to be relevant, the information needs to have these characteristics. | |