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Test Bank
Accounting Theory: Conceptual Issues in
a Political and Economic Environment
9th Edition
by Harry I. Wolk, James L. Dodd & John
J. Rozycki
100% Verified Answers| A+ Grade
1
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Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
TRUE/FALSE QUESTIONS
1. Financial accounting refers to accounting information that is used by management for decision- making purposes.
ANSWER: False
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of accounting
standards and how they are derived.
ANSWER: True
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and hypotheses and
theories.
ANSWER: True
4. Hypotheses and theories are based on an informal method of investigation.
ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
ANSWER: False
6. Accounting theory is developed and refined by the process of accounting research.
ANSWER: True
7. Indirect measures are usually preferable to direct measures because they are less costly to obtain.
ANSWER: False
8. Assessment measures are concerned with particular attributes of objects and are always direct measurements.
ANSWER: False
9. When a direct assessment measure is used, there is always only one correct measure.
ANSWER: False
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10. The simplest type of measuring system is the nominal scale.
ANSWER: True
11. A chart of accounts is an example of an ordinal classification.
ANSWER: False
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference among
ranks is the same.
ANSWER: False
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being measured.
ANSWER: True
14. Using ratio scale measurement is possible in accounting.
ANSWER: True
15. Objectivity may be defined as the degree of consensus among measurers.
ANSWER: True
16. Assessment measures are not concerned with particular attributes of objects.
ANSWER: False
17. Prediction measures are concerned with factors that may be indicative of future conditions.
ANSWER: True
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures.
ANSWER: False
19. All accounting measurements are of either the assessment or the prediction variety.
ANSWER: True
3
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20. The need for information on a timely basis may conflict with cost constraints in some situations.
ANSWER: True
21. The terms calculation and measurement both refer to the valuation of a real phenomena or attribute.
ANSWER: False
22. Calculations attempt to simulate or come as close as possible to the measurement of real phenomena or
attributes.
ANSWER: False
23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rather than
measurements.
ANSWER: True
24. There are often trade-offs between objectivity and the usefulness of numbers generated by the measurement
process.
ANSWER: True
25. Measurement is an integral part of accounting theory.
ANSWER: True
26. Throughout the financial history of the United States, current value has been the accepted valuation system for
published financial statements.
ANSWER: False
27. The discounted cash flow approach can be used to determine an objective measurement for most assets and
liabilities.
ANSWER: False
28. A general price-level adjustment refers to the purchasing power of the monetary unitary unit relative to all goods
and services in the economy.
ANSWER: True
4
Test Bank
Accounting Theory: Conceptual Issues in
a Political and Economic Environment
9th Edition
by Harry I. Wolk, James L. Dodd & John
J. Rozycki
100% Verified Answers| A+ Grade
1
,MEDSTUDY.COM
Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
TRUE/FALSE QUESTIONS
1. Financial accounting refers to accounting information that is used by management for decision- making purposes.
ANSWER: False
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of accounting
standards and how they are derived.
ANSWER: True
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and hypotheses and
theories.
ANSWER: True
4. Hypotheses and theories are based on an informal method of investigation.
ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
ANSWER: False
6. Accounting theory is developed and refined by the process of accounting research.
ANSWER: True
7. Indirect measures are usually preferable to direct measures because they are less costly to obtain.
ANSWER: False
8. Assessment measures are concerned with particular attributes of objects and are always direct measurements.
ANSWER: False
9. When a direct assessment measure is used, there is always only one correct measure.
ANSWER: False
2
,MEDSTUDY.COM
10. The simplest type of measuring system is the nominal scale.
ANSWER: True
11. A chart of accounts is an example of an ordinal classification.
ANSWER: False
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference among
ranks is the same.
ANSWER: False
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being measured.
ANSWER: True
14. Using ratio scale measurement is possible in accounting.
ANSWER: True
15. Objectivity may be defined as the degree of consensus among measurers.
ANSWER: True
16. Assessment measures are not concerned with particular attributes of objects.
ANSWER: False
17. Prediction measures are concerned with factors that may be indicative of future conditions.
ANSWER: True
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures.
ANSWER: False
19. All accounting measurements are of either the assessment or the prediction variety.
ANSWER: True
3
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20. The need for information on a timely basis may conflict with cost constraints in some situations.
ANSWER: True
21. The terms calculation and measurement both refer to the valuation of a real phenomena or attribute.
ANSWER: False
22. Calculations attempt to simulate or come as close as possible to the measurement of real phenomena or
attributes.
ANSWER: False
23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rather than
measurements.
ANSWER: True
24. There are often trade-offs between objectivity and the usefulness of numbers generated by the measurement
process.
ANSWER: True
25. Measurement is an integral part of accounting theory.
ANSWER: True
26. Throughout the financial history of the United States, current value has been the accepted valuation system for
published financial statements.
ANSWER: False
27. The discounted cash flow approach can be used to determine an objective measurement for most assets and
liabilities.
ANSWER: False
28. A general price-level adjustment refers to the purchasing power of the monetary unitary unit relative to all goods
and services in the economy.
ANSWER: True
4
