TEST BANK
Accounting Theory: Conceptual Issues in a Political and Economic Environment
Harry I. Wolk
9th Edition
All Chapters Complete (Questions with Verified Answers)
1
,Table of Contents
1. An Introduction to Accounting Theory
2. Accounting Theory and Accounting Research
3. Development of the Institutional Structure of Financial Accounting
4. The Economics of Financial Reporting Regulation
5. Postulates, Principles, and Concepts
6. The Search for Objectives
7. The FASB's Conceptual Framework
8. Usefulness of Accounting Information to Investors and Creditors
9. The Decision-Usefulness Approach to Financial Reporting
10. Information Economics
11. Positive Accounting Theory
12. The Income Statement
13. Statement of Cash Flows
14. Accounting for Changing Prices and Inflation
15. Income Taxes and Financial Accounting
16. International Accounting and International Financial Reporting Standards
17. The Future of Accounting Theory
2
, 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
3
, 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
4
Accounting Theory: Conceptual Issues in a Political and Economic Environment
Harry I. Wolk
9th Edition
All Chapters Complete (Questions with Verified Answers)
1
,Table of Contents
1. An Introduction to Accounting Theory
2. Accounting Theory and Accounting Research
3. Development of the Institutional Structure of Financial Accounting
4. The Economics of Financial Reporting Regulation
5. Postulates, Principles, and Concepts
6. The Search for Objectives
7. The FASB's Conceptual Framework
8. Usefulness of Accounting Information to Investors and Creditors
9. The Decision-Usefulness Approach to Financial Reporting
10. Information Economics
11. Positive Accounting Theory
12. The Income Statement
13. Statement of Cash Flows
14. Accounting for Changing Prices and Inflation
15. Income Taxes and Financial Accounting
16. International Accounting and International Financial Reporting Standards
17. The Future of Accounting Theory
2
, 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
3
, 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
4
