Intermediate Accounting: Ch1 Test Bank
1. d: Charging off equipment that cost less than $20 would be an example of the
application of:
a. going concern
b. cost
c. matching
d. materiality
e. realization
2. c: (QUIZ) The going concern assumption:
a. is applicable to all financial statements
b. primarily involves periodic income measurement
c. allows for the statements to be prepared under generally accepted accounting
principles
d. requires that accounting procedures be the same from period to period
e. none of the answers are correct
3. e: Understating assets and revenues is justified based on:
a. realization assumption
b. matching
c. consistency
d. realization
e. none of the answers are correct
4. a: The assumption that enables us to prepare periodic statements between the
time that a business commences operations and the time it goes out of business is:
a. time period
b. business entity
c. historical cost
d. transaction
e. none of the answers are correct
5. c: Valuing assets at their liquidation values is not consistent with:
a. conservatism
b. materiality
, Intermediate Accounting: Ch1 Test Bank
c. going concern
d. time period
e. none of the answers are correct
6. c: The business being separate and distinct from the owners is an integral part
of the:
a. time period assumption
b. going concern assumption
c. business entity assumption
d. realization assumption
e. none of the answers are correct
7. e: The principle that assumes the reader of the financial statements is not
interested in the liquidation values is: a. conservatism
b. matching
c. time period
d. realization
e. none of the answers are correct
8. c: An accounting period that ends when operations are at a low ebb is: a.
a calendar year
b. a fiscal year
c. the natural business year
d. an operating year
e. none of the answers are correct
9. a: The accounting principle that assumes that inflation will not take place or
will be immaterial is:
a. monetary unit
b. historical cost
c. realization
d. going concern
e. none of the answers are correct
, Intermediate Accounting: Ch1 Test Bank
10. d: Valuing inventory at the lower of cost or market is an application of the:
a. time period assumption
b. realization principle
c. going concern principle
d. conservatism principle
e. none of the answers are correct
11. d: The realization principle leads accountants to usually recognize revenue at:
a. the end of production
b. during production
c. the receipt of cash
d. the point of sale
e. none of the answers are correct
12. d: The comment that "items that are not material may be recorded in the
financial statements in the most economical and expedient manner possible" is
representative of: a. matching
b. conservatism
c. realization
d. materiality
e. none of the answers are correct
13. a: The assumption that deals with when to recognize the costs that are
associated with the revenue that is being recognized is:
a. matching
b. going concern
c. consistency
d. materiality
e. none of the answers are correct
14. d: The most significant current source of generally accepted accounting
principles is the:
a. New York Stock Exchange
b. Accounting Principles Board
1. d: Charging off equipment that cost less than $20 would be an example of the
application of:
a. going concern
b. cost
c. matching
d. materiality
e. realization
2. c: (QUIZ) The going concern assumption:
a. is applicable to all financial statements
b. primarily involves periodic income measurement
c. allows for the statements to be prepared under generally accepted accounting
principles
d. requires that accounting procedures be the same from period to period
e. none of the answers are correct
3. e: Understating assets and revenues is justified based on:
a. realization assumption
b. matching
c. consistency
d. realization
e. none of the answers are correct
4. a: The assumption that enables us to prepare periodic statements between the
time that a business commences operations and the time it goes out of business is:
a. time period
b. business entity
c. historical cost
d. transaction
e. none of the answers are correct
5. c: Valuing assets at their liquidation values is not consistent with:
a. conservatism
b. materiality
, Intermediate Accounting: Ch1 Test Bank
c. going concern
d. time period
e. none of the answers are correct
6. c: The business being separate and distinct from the owners is an integral part
of the:
a. time period assumption
b. going concern assumption
c. business entity assumption
d. realization assumption
e. none of the answers are correct
7. e: The principle that assumes the reader of the financial statements is not
interested in the liquidation values is: a. conservatism
b. matching
c. time period
d. realization
e. none of the answers are correct
8. c: An accounting period that ends when operations are at a low ebb is: a.
a calendar year
b. a fiscal year
c. the natural business year
d. an operating year
e. none of the answers are correct
9. a: The accounting principle that assumes that inflation will not take place or
will be immaterial is:
a. monetary unit
b. historical cost
c. realization
d. going concern
e. none of the answers are correct
, Intermediate Accounting: Ch1 Test Bank
10. d: Valuing inventory at the lower of cost or market is an application of the:
a. time period assumption
b. realization principle
c. going concern principle
d. conservatism principle
e. none of the answers are correct
11. d: The realization principle leads accountants to usually recognize revenue at:
a. the end of production
b. during production
c. the receipt of cash
d. the point of sale
e. none of the answers are correct
12. d: The comment that "items that are not material may be recorded in the
financial statements in the most economical and expedient manner possible" is
representative of: a. matching
b. conservatism
c. realization
d. materiality
e. none of the answers are correct
13. a: The assumption that deals with when to recognize the costs that are
associated with the revenue that is being recognized is:
a. matching
b. going concern
c. consistency
d. materiality
e. none of the answers are correct
14. d: The most significant current source of generally accepted accounting
principles is the:
a. New York Stock Exchange
b. Accounting Principles Board
