ANS: A 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.
10. Valuing inventory at the lower of cost or market is an application of the:
| a. | time period assumption. |
| b. | realization principle. |
| c. | going concern principle. |
| d. | conservatism principle. |
| e. | None of the answers are correct. |
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.
11. The realization principle leads accountants to usually recognize revenue at:
| a. | the end of production. |
| b. | during production. |
| c. | the receipt of cash. |
| d. | the point of sale. |
| e. | None of the answers are correct. |
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.
12. The comment that "items that are not material may be recorded in the financial statements in the most economical and expedient manner possible" is representative of:
| a. | matching. |
| b. | conservatism. |
| c. | realization. |
| d. | materiality. |
| e. | None of the answers are correct. |