CFAS test banks.docx

FINANCIAL ACCOUNTING THEORY - TEST BANK - 2 1. The objectives of financial reporting are based on a. Generally accepted accounting principles b. Reporting for regulators c. The need for conservatism d. The needs of the users of the information 2. The relevance of providing information in financial statements is subject to the constraint of a. Comparability b. Cost-benefit c. Reliability d. Faithful representation 3. Which of the following is an enhancing quality that relates to both relevance and faithful representation? a. b. c. Predictive value d. Freedom from error 4. What is the requirement for incorporating an item into the financial statements? a. It meets the definition of relevance and faithful representation. b. It meets the definition of an element and can be measured reliably c. It satisfies the criteria of capital maintenance d. It meets the requirement of comparability and consistency. 5. What is the purpose of reporting comprehensive income? a. To report changes in equity due to transactions with owners. b. To report a measure of overall entity performance. c. To replace net income with a better measure. d. To combine income from continuing operations with income from discontinued operations. 6. When a full set of general-purpose financial statements are presented, comprehensive income and its components should a. Appear as a part of discontinued operations. b. Be reported net of related income tax should effect, in total and individually. c. Appear in a supplemental schedule in the notes to financial statements. d. d. 7. Which is an acceptable method for reporting comprehensive income under IFRS? a. One comprehensive income statement. b. Two statements, an income statement and a comprehensive income statement. Comparability Confirmatory value D Be displayed in a financial statement that has the same prominence as other financial