Intermediate Accounting Exam #1 with verified question and answers

Intermediate Accounting Exam #1 with verified question and answers 1. According to Statement of Financial Accounting Concepts No. 2, predictive value is an ingredient of the fundamental quality of: Relevance: Faithful Representation: a. yes no b. yes yes c. no no d. no yes: a: yes; no 2. Financial information exhibits the characteristic of consistency when: a. expenses are reposted as charges against revenue in the period in which they are paid b. companies apply the same accounting treatment to similar events, from period to period c. extraordinary gains and losses are not included on the income statement d. accounting procedures are adopted which give a consistent rate of net income: b. companies apply the same accounting treatment to similar events, from period to period 3. In classifying the elements of financial statements, the primary distinction between revenues and gains is a. the materiality of the amounts involved b. the likelihood that the transactions involved will recur in the future c. the nature of the activities that gave rise to the transactions involved d. the costs verses the benefits of the alternative methods of disclosing the transactions involved: c. the nature of the activities that gave rise to the transactions involved