TEST BANK
Accounting Theory: Conceptual Issues in a Political and Economic Environment,
9th edition
By Harry I. Wolk, James L. Dodd
TU
TO
R
G
U
R
U
, Table of Content
Chapter 1: An Introduction to Accounting Theory
Chapter 2: Accounting Theory and Accounting Research
Chapter 3: Development of the Institutional Structure of Financial Accounting
Chapter 4: The Economics of Financial Reporting Regulation
Chapter 5: Postulates, Principles, and Concepts
Chapter 6: The Search for Objectives
Chapter 7: The FASB ' s Conceptual Framework
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Chapter 8: Usefulness of Accounting Information to Investors and Creditors
Chapter 9: Uniformity and Disclosure: Some Policy-Making Directions
Chapter 10: International Accounting
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Chapter 11: The Balance Sheet
Chapter 12: The Income Statement
Chapter 13: Statement of Cash Flows
Chapter 14: Income Taxes and Financial Accounting
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Chapter 15: Pensions and Other Postretirement Benefits
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Chapter 16: Leases
Chapter 17: Intercorporate Equity Investments
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R
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, KJHGFDS
TRUE/FALSE
1. Financial accounting refers to accounting information that is used by management for decision-
making purposes.
ANSWER: F
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of
accounting standards and how they are derived.
ANSWER: T
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models,
TU
and hypotheses and theories.
ANSWER: T
4. Hypotheses and theories are based on an informal method of investigation.
TO
ANSWER: F
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
ANSWER: F
6. Accounting theory is developed and refined by the process of accounting research.
R
ANSWER: T
G
7. Indirect measures are usually preferable to direct measures because they are less costly to obtain.
ANSWER: F
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8. Assessment measures are concerned with particular attributes of objects and are always direct
measurements.
ANSWER: F
R
9. When a direct assessment measure is used, there is always only one correct measure.
U
ANSWER: F
10. The simplest type of measuring system is the nominal scale.
ANSWER: T
11. A chart of accounts is an example of an ordinal classification.
ANSWER: F
KJHGFDS
, Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of
preference among ranks is the same.
ANSWER: F
13. In a ratio scale, the zero point implies “nothingness,” or the absence of the quality being
measured.
ANSWER: T
14. Using ratio scale, measurement is possible in accounting.
TU
ANSWER: T
15. Objectivity may be defined as the degree of consensus among measurers.
ANSWER: T
16. Assessment measures are not concerned with particular attributes of objects.
TO
ANSWER: F
17. Prediction measures are concerned with factors that may be indicative of future conditions.
ANSWER: T
R
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction
measures.
G
ANSWER: F
19. All accounting measurements are of either the assessment or the prediction variety.
U
ANSWER: T
20. The need for information on a timely basis may conflict with cost constraints in some situations.
R
ANSWER: T
21. The terms calculation and measurement both refer to the valuation of a real phenomena or
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attribute.
ANSWER: F
22. Calculations attempt to simulate or come as close as possible to the measurement of real
phenomena or attributes.
ANSWER: F
Accounting Theory: 9th edition Page 3 of 11
Accounting Theory: Conceptual Issues in a Political and Economic Environment,
9th edition
By Harry I. Wolk, James L. Dodd
TU
TO
R
G
U
R
U
, Table of Content
Chapter 1: An Introduction to Accounting Theory
Chapter 2: Accounting Theory and Accounting Research
Chapter 3: Development of the Institutional Structure of Financial Accounting
Chapter 4: The Economics of Financial Reporting Regulation
Chapter 5: Postulates, Principles, and Concepts
Chapter 6: The Search for Objectives
Chapter 7: The FASB ' s Conceptual Framework
TU
Chapter 8: Usefulness of Accounting Information to Investors and Creditors
Chapter 9: Uniformity and Disclosure: Some Policy-Making Directions
Chapter 10: International Accounting
TO
Chapter 11: The Balance Sheet
Chapter 12: The Income Statement
Chapter 13: Statement of Cash Flows
Chapter 14: Income Taxes and Financial Accounting
R
Chapter 15: Pensions and Other Postretirement Benefits
G
Chapter 16: Leases
Chapter 17: Intercorporate Equity Investments
U
R
U
, KJHGFDS
TRUE/FALSE
1. Financial accounting refers to accounting information that is used by management for decision-
making purposes.
ANSWER: F
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of
accounting standards and how they are derived.
ANSWER: T
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models,
TU
and hypotheses and theories.
ANSWER: T
4. Hypotheses and theories are based on an informal method of investigation.
TO
ANSWER: F
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
ANSWER: F
6. Accounting theory is developed and refined by the process of accounting research.
R
ANSWER: T
G
7. Indirect measures are usually preferable to direct measures because they are less costly to obtain.
ANSWER: F
U
8. Assessment measures are concerned with particular attributes of objects and are always direct
measurements.
ANSWER: F
R
9. When a direct assessment measure is used, there is always only one correct measure.
U
ANSWER: F
10. The simplest type of measuring system is the nominal scale.
ANSWER: T
11. A chart of accounts is an example of an ordinal classification.
ANSWER: F
KJHGFDS
, Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of
preference among ranks is the same.
ANSWER: F
13. In a ratio scale, the zero point implies “nothingness,” or the absence of the quality being
measured.
ANSWER: T
14. Using ratio scale, measurement is possible in accounting.
TU
ANSWER: T
15. Objectivity may be defined as the degree of consensus among measurers.
ANSWER: T
16. Assessment measures are not concerned with particular attributes of objects.
TO
ANSWER: F
17. Prediction measures are concerned with factors that may be indicative of future conditions.
ANSWER: T
R
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction
measures.
G
ANSWER: F
19. All accounting measurements are of either the assessment or the prediction variety.
U
ANSWER: T
20. The need for information on a timely basis may conflict with cost constraints in some situations.
R
ANSWER: T
21. The terms calculation and measurement both refer to the valuation of a real phenomena or
U
attribute.
ANSWER: F
22. Calculations attempt to simulate or come as close as possible to the measurement of real
phenomena or attributes.
ANSWER: F
Accounting Theory: 9th edition Page 3 of 11
