Applied Financial Accounting - Exam 1
Questions With Solutions 100% Correct
Statements of Financial Accounting Concepts issued by the FASB
- Identify the conceptual framework within which accounting standards are developed.
- Are subject to approval of the SEC.
- Represent GAAP.
- Have been superseded by SFASs. identify the conceptual framework within which
accounting standards are developed
In general, revenue is recognized when
- A contract has been signed.
- A purchase order has been received.
, Applied Financial Accounting - Exam 1
Questions With Solutions 100% Correct
- The sales price has been collected.
- A good or service has been delivered to a customer. A good or service has been delivered
to a customer.
In depreciating the cost of an asset, accountants are most concerned with
- Recognizing expense in the appropriate period.
- Recognizing revenue in the appropriate period.
- Conservatism.
- Full disclosure. Recognizing expense in the appropriate period.
The primary objective of expense recognition is to
- Promote comparability between financial statements of different periods.
, Applied Financial Accounting - Exam 1
Questions With Solutions 100% Correct
- Provide full disclosure.
- Provide timely information to decision makers.
- Record expenses in the period that related revenues are recognized. Record expenses in
the period that related revenues are recognized.
True or False:
The separate entity assumption states that, in the absence of contrary evidence, all entities will
survive indefinitely. False
Expense recognition Record expenses in the period the related revenue is recognized
periodicity assumption The life of an enterprise can be divided into artificial time periods.
Historical Cost Principle The original transaction value upon acquisition.
Questions With Solutions 100% Correct
Statements of Financial Accounting Concepts issued by the FASB
- Identify the conceptual framework within which accounting standards are developed.
- Are subject to approval of the SEC.
- Represent GAAP.
- Have been superseded by SFASs. identify the conceptual framework within which
accounting standards are developed
In general, revenue is recognized when
- A contract has been signed.
- A purchase order has been received.
, Applied Financial Accounting - Exam 1
Questions With Solutions 100% Correct
- The sales price has been collected.
- A good or service has been delivered to a customer. A good or service has been delivered
to a customer.
In depreciating the cost of an asset, accountants are most concerned with
- Recognizing expense in the appropriate period.
- Recognizing revenue in the appropriate period.
- Conservatism.
- Full disclosure. Recognizing expense in the appropriate period.
The primary objective of expense recognition is to
- Promote comparability between financial statements of different periods.
, Applied Financial Accounting - Exam 1
Questions With Solutions 100% Correct
- Provide full disclosure.
- Provide timely information to decision makers.
- Record expenses in the period that related revenues are recognized. Record expenses in
the period that related revenues are recognized.
True or False:
The separate entity assumption states that, in the absence of contrary evidence, all entities will
survive indefinitely. False
Expense recognition Record expenses in the period the related revenue is recognized
periodicity assumption The life of an enterprise can be divided into artificial time periods.
Historical Cost Principle The original transaction value upon acquisition.
