ACCT 301 EXAM 1 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
Question:
1. Which of the following is not a benefit associated with
the FASB Conceptual Framework
Project?
a. A conceptual framework should increase financial
statement users' understanding of
and confidence in financial reporting.
b. Practical problems should be more quickly solvable by
reference to an existing
conceptual framework.
c. A coherent set of accounting standards and rules
should result.
d. Business entities will need far less assistance from
accountants because the financial
reporting process will be quite easy to apply.
Answer:
D
Question:
2. Generally accepted accounting principles
a. are fundamental truths or axioms that can be derived
from laws of nature.
b. derive their authority from legal court proceedings.
c. derive their credibility and authority from general
recognition and acceptance by the
accounting profession.
d. have been specified in detail in the FASB conceptual
framework.
Answer:
C
,Question:
3. A soundly developed conceptual framework of concepts
and objectives should
a. increase financial statement users' understanding of
and confidence in financial
reporting.
b. enhance comparability among companies' financial
statements.
c. allow new and emerging practical problems to be
more quickly solved.
d. All of these answer choices are correct.
Answer:
D
Question:
4. What is a purpose of having a conceptual framework?
a. To make sure that economic activity can be identified
with a particular legal entity.
b. To segregate activities among different companies.
c. To provide comparable information for different
companies.
d. To enable the profession to more quickly solve
emerging practical problems and to
provide a foundation from which to build more useful
standards.
Answer:
D
Question:
5. Which of the following is not true concerning a
conceptual framework in accounting?
a. It should be a basis for standard-setting.
b. It should allow practical problems to be solved more
quickly by reference to it.
c. It should be based on fundamental truths that are
derived from the laws of nature.
d. All of these answer choices are true.
Answer:
C
, Question:
6. In the conceptual framework for financial reporting, what
provides "the why"--the purpose
of accounting?
a. Recognition, measurement, and disclosure concepts
such as assumptions, principles,
and constraints
b. Qualitative characteristics of accounting information
c. Elements of financial statements
d. Objective of financial reporting
Answer:
D
Question:
7. The underlying theme of the conceptual framework is
a. decision usefulness.
b. understandability.
c. faithful representation.
d. comparability.
Answer:
A
Question:
8. The objective of general-purpose financial reporting is to
provide financial information
about a reporting entity to each of the following except
a. potential equity investors.
b. potential lenders.
c. present investors.
d. All of these answers are correct.
Answer:
D
AND CORRECT ANSWERS
Question:
1. Which of the following is not a benefit associated with
the FASB Conceptual Framework
Project?
a. A conceptual framework should increase financial
statement users' understanding of
and confidence in financial reporting.
b. Practical problems should be more quickly solvable by
reference to an existing
conceptual framework.
c. A coherent set of accounting standards and rules
should result.
d. Business entities will need far less assistance from
accountants because the financial
reporting process will be quite easy to apply.
Answer:
D
Question:
2. Generally accepted accounting principles
a. are fundamental truths or axioms that can be derived
from laws of nature.
b. derive their authority from legal court proceedings.
c. derive their credibility and authority from general
recognition and acceptance by the
accounting profession.
d. have been specified in detail in the FASB conceptual
framework.
Answer:
C
,Question:
3. A soundly developed conceptual framework of concepts
and objectives should
a. increase financial statement users' understanding of
and confidence in financial
reporting.
b. enhance comparability among companies' financial
statements.
c. allow new and emerging practical problems to be
more quickly solved.
d. All of these answer choices are correct.
Answer:
D
Question:
4. What is a purpose of having a conceptual framework?
a. To make sure that economic activity can be identified
with a particular legal entity.
b. To segregate activities among different companies.
c. To provide comparable information for different
companies.
d. To enable the profession to more quickly solve
emerging practical problems and to
provide a foundation from which to build more useful
standards.
Answer:
D
Question:
5. Which of the following is not true concerning a
conceptual framework in accounting?
a. It should be a basis for standard-setting.
b. It should allow practical problems to be solved more
quickly by reference to it.
c. It should be based on fundamental truths that are
derived from the laws of nature.
d. All of these answer choices are true.
Answer:
C
, Question:
6. In the conceptual framework for financial reporting, what
provides "the why"--the purpose
of accounting?
a. Recognition, measurement, and disclosure concepts
such as assumptions, principles,
and constraints
b. Qualitative characteristics of accounting information
c. Elements of financial statements
d. Objective of financial reporting
Answer:
D
Question:
7. The underlying theme of the conceptual framework is
a. decision usefulness.
b. understandability.
c. faithful representation.
d. comparability.
Answer:
A
Question:
8. The objective of general-purpose financial reporting is to
provide financial information
about a reporting entity to each of the following except
a. potential equity investors.
b. potential lenders.
c. present investors.
d. All of these answers are correct.
Answer:
D
