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
, Chapter 1—
AN INTRODUCTION TO ACCOUNTING THEORY TR
UE/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 acco
unting 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 investigat
ion. ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historica
l cost. ANSWER: False
6. Accounting theory is developed and refined by the process of accounting rese
arch. ANSWER: True
7. Indirect measures are usually preferable to direct measures because they are less costly to o
btain. ANSWER: False
8. Assessment measures are concerned with particular attributes of objects and are always direct measure
ments. ANSWER: False
9. When a direct assessment measure is used, there is always only one correct me
asure. ANSWER: False
2
,10. The` simplest`type` of` measuring` system`is`the` nominal` sc`
ale.` ANSWER:` True
11. A`chart` of`accounts` is` an` example` of`an` ordinal` classificat`
ion.` 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` m
e`asured.` ANSWER:` True
14. Using`ratio` scale` measurement`is`possible` in`accounti`
ng.` ANSWER:` True
15. Objectivity` may`be` defined` as` the` degree` of`consensus` among` measu
`rers.` ANSWER:` True
16. Assessment` measures` are` not` concerned` with`particular` attributes`of`obje`
cts.` ANSWER:` False
17. Prediction` measures` are` concerned` with` factors` that` may` be` indicative` of` future` condit
`ions.` ANSWER:` True
18. Timeliness` and` cost` are` pertinent` to` assessment` measures` but` are` not` pertinent` to` prediction` mea
`sures.` ANSWER:` False
19. All`accounting` measurements`are` of`either` the` assessment` or` the` prediction`var`
iety.` ANSWER:` True
3
, 20. The` need` for` information` on` a` timely` basis` may` conflict` with` cost` constraints` in` some` sit
u`ations.` ANSWER:` True
21. The` terms` calculation` and` measurement` both` refer` to` the` valuation` of` a` real` phenomena` or` att
`ribute.` ANSWER:` False
22. Calculations` attempt` to` simulate` or` come` as` close` as` possible` to` the` measurement` of` real` pheno
`mena` or` attributes.
ANSWER:` False
23. FIFO` and` LIFO` measures` of` cost` of` goods` sold` and` inventories` are` examples` of` calculations` rath
`er` than` measurements.
ANSWER:` True
24. There` are` often` trade-
offs` between` objectivity` and` the` usefulness` of` numbers` generated` by`the` measurement` process.`ANSW
ER:`True
25. Measurement`is`an`integral`part`of`accounting`theo`r
y.` ANSWER:` True
26. Throughout` the` financial` history` of` the` United` States,` current` value` has` been` the` accepted` valuation` sys
t`em` for` published` financial` statements.
ANSWER:` False
27. The` discounted` cash` flow` approach` can` be` used` to` determine` an` objective` measurement` for` most` as
s`ets` 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` service
`s` in` the` economy.
ANSWER:` True
4
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
, Chapter 1—
AN INTRODUCTION TO ACCOUNTING THEORY TR
UE/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 acco
unting 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 investigat
ion. ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historica
l cost. ANSWER: False
6. Accounting theory is developed and refined by the process of accounting rese
arch. ANSWER: True
7. Indirect measures are usually preferable to direct measures because they are less costly to o
btain. ANSWER: False
8. Assessment measures are concerned with particular attributes of objects and are always direct measure
ments. ANSWER: False
9. When a direct assessment measure is used, there is always only one correct me
asure. ANSWER: False
2
,10. The` simplest`type` of` measuring` system`is`the` nominal` sc`
ale.` ANSWER:` True
11. A`chart` of`accounts` is` an` example` of`an` ordinal` classificat`
ion.` 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` m
e`asured.` ANSWER:` True
14. Using`ratio` scale` measurement`is`possible` in`accounti`
ng.` ANSWER:` True
15. Objectivity` may`be` defined` as` the` degree` of`consensus` among` measu
`rers.` ANSWER:` True
16. Assessment` measures` are` not` concerned` with`particular` attributes`of`obje`
cts.` ANSWER:` False
17. Prediction` measures` are` concerned` with` factors` that` may` be` indicative` of` future` condit
`ions.` ANSWER:` True
18. Timeliness` and` cost` are` pertinent` to` assessment` measures` but` are` not` pertinent` to` prediction` mea
`sures.` ANSWER:` False
19. All`accounting` measurements`are` of`either` the` assessment` or` the` prediction`var`
iety.` ANSWER:` True
3
, 20. The` need` for` information` on` a` timely` basis` may` conflict` with` cost` constraints` in` some` sit
u`ations.` ANSWER:` True
21. The` terms` calculation` and` measurement` both` refer` to` the` valuation` of` a` real` phenomena` or` att
`ribute.` ANSWER:` False
22. Calculations` attempt` to` simulate` or` come` as` close` as` possible` to` the` measurement` of` real` pheno
`mena` or` attributes.
ANSWER:` False
23. FIFO` and` LIFO` measures` of` cost` of` goods` sold` and` inventories` are` examples` of` calculations` rath
`er` than` measurements.
ANSWER:` True
24. There` are` often` trade-
offs` between` objectivity` and` the` usefulness` of` numbers` generated` by`the` measurement` process.`ANSW
ER:`True
25. Measurement`is`an`integral`part`of`accounting`theo`r
y.` ANSWER:` True
26. Throughout` the` financial` history` of` the` United` States,` current` value` has` been` the` accepted` valuation` sys
t`em` for` published` financial` statements.
ANSWER:` False
27. The` discounted` cash` flow` approach` can` be` used` to` determine` an` objective` measurement` for` most` as
s`ets` 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` service
`s` in` the` economy.
ANSWER:` True
4
