Conceptual Framework Questions and Answers

Conceptual Framework Questions and
Answers
Under the Conceptual Framework of Financial Reporting, users of financial information may be classified
into

a. Heavy users (management) and slight users (public, government)
b. Primary users (existing and potential investors and creditors) and other users
c. Internal users (employees, customers) and external users (investors, creditors)
d. Main users (existing investors, creditors) and incidental users (potential investors, creditors)

Answer

b. Primary users (existing and potential investors and creditors) and other users

2

Q

Which of the following is listed in the Framework as underlying assumption regarding financial
information?

a. The financial statements are reliable
b. Any changes of accounting policy are neutral
c. The entity can be viewed as a liquidating concern
d. The financial statements are prepared under the accrual basis

Answer

d. The financial statements are prepared under the accrual basis

3

Q

Which of the following is not considered a primary characteristics of financial information?

a. Comparability
b. Completeness
c. Neutrality
d. Timeliness

Answer

a. Comparability

4

Q

Which of the situations violates the concept of reliability?