Accounting Theory: Conceptual Issues in a
Political and Economic Environment 9th
Edition by Harry I. Wolk, James L. Dodd
TEST BANK
ALL CHAPTERS COVERED| EXPERT VERIFIED
QUESTIONS AND ACCURATE ANSWERS
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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.
CORRECT ANSWER: False
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of
accounting standards and how they are derived.
CORRECT ANSWER: True
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and
hypotheses and theories.
CORRECT ANSWER: True
4. Hypotheses and theories are based on an informal method of investigation.
CORRECT ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
CORRECT ANSWER: False
6. Accounting theory is developed and refined by the process of accounting research.
CORRECT ANSWER: True
7. Indirect measures are usually preferable to direct measures because they are less costly to obtain.
CORRECT ANSWER: False
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,8. Assessment measures are concerned with particular attributes of objects and are always direct
measurements.
CORRECT ANSWER: False
9. When a direct assessment measure is used, there is always only one correct measure.
CORRECT ANSWER: False
10. The simplest type of measuring system is the nominal scale.
CORRECT ANSWER: True
11. A chart of accounts is an example of an ordinal classification.
CORRECT ANSWER: False
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference
among ranks is the same.
CORRECT ANSWER: False
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being measured.
CORRECT ANSWER: True
14. Using ratio scale measurement is possible in accounting.
CORRECT ANSWER: True
15. Objectivity may be defined as the degree of consensus among measurers.
CORRECT ANSWER: True
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, 16. Assessment measures are not concerned with particular attributes of objects.
CORRECT ANSWER: False
17. Prediction measures are concerned with factors that may be indicative of future conditions.
CORRECT ANSWER: True
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures.
CORRECT ANSWER: False
19. All accounting measurements are of either the assessment or the prediction variety.
CORRECT ANSWER: True
20. The need for information on a timely basis may conflict with cost constraints in some situations.
CORRECT ANSWER: True
21. The terms calculation and measurement both refer to the valuation of a real phenomena or attribute.
CORRECT ANSWER: False
22. Calculations attempt to simulate or come as close as possible to the measurement of real phenomena
or attributes.
CORRECT ANSWER: False
23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rather
than measurements.
CORRECT ANSWER: True
TB
Ac
Page | 4
er
Political and Economic Environment 9th
Edition by Harry I. Wolk, James L. Dodd
TEST BANK
ALL CHAPTERS COVERED| EXPERT VERIFIED
QUESTIONS AND ACCURATE ANSWERS
TB
Ac
Page | 1
er
, 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.
CORRECT ANSWER: False
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of
accounting standards and how they are derived.
CORRECT ANSWER: True
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and
hypotheses and theories.
CORRECT ANSWER: True
4. Hypotheses and theories are based on an informal method of investigation.
CORRECT ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
CORRECT ANSWER: False
6. Accounting theory is developed and refined by the process of accounting research.
CORRECT ANSWER: True
7. Indirect measures are usually preferable to direct measures because they are less costly to obtain.
CORRECT ANSWER: False
TB
Ac
Page | 2
er
,8. Assessment measures are concerned with particular attributes of objects and are always direct
measurements.
CORRECT ANSWER: False
9. When a direct assessment measure is used, there is always only one correct measure.
CORRECT ANSWER: False
10. The simplest type of measuring system is the nominal scale.
CORRECT ANSWER: True
11. A chart of accounts is an example of an ordinal classification.
CORRECT ANSWER: False
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference
among ranks is the same.
CORRECT ANSWER: False
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being measured.
CORRECT ANSWER: True
14. Using ratio scale measurement is possible in accounting.
CORRECT ANSWER: True
15. Objectivity may be defined as the degree of consensus among measurers.
CORRECT ANSWER: True
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Ac
Page | 3
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, 16. Assessment measures are not concerned with particular attributes of objects.
CORRECT ANSWER: False
17. Prediction measures are concerned with factors that may be indicative of future conditions.
CORRECT ANSWER: True
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures.
CORRECT ANSWER: False
19. All accounting measurements are of either the assessment or the prediction variety.
CORRECT ANSWER: True
20. The need for information on a timely basis may conflict with cost constraints in some situations.
CORRECT ANSWER: True
21. The terms calculation and measurement both refer to the valuation of a real phenomena or attribute.
CORRECT ANSWER: False
22. Calculations attempt to simulate or come as close as possible to the measurement of real phenomena
or attributes.
CORRECT ANSWER: False
23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rather
than measurements.
CORRECT ANSWER: True
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