Test Bank
Accounting Theory: Conceptual Issues in
a Political and Economic Environment
9th Edition
by Harry I. Wolk, James L. Dodd & John
J. Rozycki
100% Verified Answers| A+ Grade
1
, Chapter 1— wq
AN INTRODUCTION TO ACCOUNTING THEORY T
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RUE/FALSE QUESTIONS wq
1. Financial accounting refers to accounting information that is used by management for decision-
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wq making purposes. ANSWER: False
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2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of acc
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ounting standards and how they are derived.
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ANSWER: True wq
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and hypothese
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s and theories.
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ANSWER: True wq
4. Hypotheses and theories are based on an informal method of investig
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ation. ANSWER: False
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5. Replacement cost as a measure of asset value is generally more reliable than historic
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al cost. ANSWER: False
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6. Accounting theory is developed and refined by the process of accounting res
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earch. ANSWER: True
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7. Indirect measures are usually preferable to direct measures because they are less costly to
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obtain. ANSWER: False
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8. Assessment measures are concerned with particular attributes of objects and are always direct measure
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ments. ANSWER: False
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9. When a direct assessment measure is used, there is always only one correct m
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easure. ANSWER: False
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2
,10. The simplest type of measuring system is the nominal s
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cale. ANSWER: True
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11. A chart of accounts is an example of an ordinal classific
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ation. ANSWER: False
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12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference
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among ranks is the same.
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ANSWER: False wq
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being m
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easured. ANSWER: Truewq wq
14. Using ratio scale measurement is possible in accounti
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ng. ANSWER: True
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15. Objectivity may be defined as the degree of consensus among meas
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urers. ANSWER: True
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16. Assessment measures are not concerned with particular attributes of obj
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ects. ANSWER: False
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17. Prediction measures are concerned with factors that may be indicative of future cond
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itions. ANSWER: True
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18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction m
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easures. ANSWER: False
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19. All accounting measurements are of either the assessment or the prediction v
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ariety. ANSWER: True
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3
, 20. The need for information on a timely basis may conflict with cost constraints in some sit
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uations. ANSWER: True
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21. The terms calculation and measurement both refer to the valuation of a real phenomena or a
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ttribute. ANSWER: False
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22. Calculations attempt to simulate or come as close as possible to the measurement of real pheno
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mena or attributes.
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ANSWER: False wq
23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rat
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her than measurements.
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ANSWER: True wq
24. There are often trade-
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offs between objectivity and the usefulness of numbers generated by the measurement process.
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ANSWER: True wq
25. Measurement is an integral part of accounting the
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ory. ANSWER: True
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26. Throughout the financial history of the United States, current value has been the accepted valuation sy
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stem for published financial statements.
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ANSWER: False wq
27. The discounted cash flow approach can be used to determine an objective measurement for most as
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sets and liabilities.
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ANSWER: False wq
28. A general price-
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level adjustment refers to the purchasing power of the monetary unitary unit relative to all goods and servic
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es in the economy.
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ANSWER: True wq
4
Accounting Theory: Conceptual Issues in
a Political and Economic Environment
9th Edition
by Harry I. Wolk, James L. Dodd & John
J. Rozycki
100% Verified Answers| A+ Grade
1
, Chapter 1— wq
AN INTRODUCTION TO ACCOUNTING THEORY T
wq wq wq wq wq
RUE/FALSE QUESTIONS wq
1. Financial accounting refers to accounting information that is used by management for decision-
wq wq wq wq wq wq wq wq wq wq wq wq
wq making purposes. ANSWER: False
wq wq wq
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of acc
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ounting standards and how they are derived.
wq wq wq wq wq wq
ANSWER: True wq
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and hypothese
wq wq wq wq wq wq wq wq wq wq
s and theories.
wq wq
ANSWER: True wq
4. Hypotheses and theories are based on an informal method of investig
wq wq wq wq wq wq wq wq wq wq
ation. ANSWER: False
wq wq
5. Replacement cost as a measure of asset value is generally more reliable than historic
wq wq wq wq wq wq wq wq wq wq wq wq wq
al cost. ANSWER: False
wq wq wq
6. Accounting theory is developed and refined by the process of accounting res
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earch. ANSWER: True
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7. Indirect measures are usually preferable to direct measures because they are less costly to
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obtain. ANSWER: False
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8. Assessment measures are concerned with particular attributes of objects and are always direct measure
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ments. ANSWER: False
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9. When a direct assessment measure is used, there is always only one correct m
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easure. ANSWER: False
wq wq
2
,10. The simplest type of measuring system is the nominal s
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cale. ANSWER: True
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11. A chart of accounts is an example of an ordinal classific
wq wq wq wq wq wq wq wq wq wq
ation. ANSWER: False
wq wq
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference
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among ranks is the same.
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ANSWER: False wq
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being m
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easured. ANSWER: Truewq wq
14. Using ratio scale measurement is possible in accounti
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ng. ANSWER: True
wq wq
15. Objectivity may be defined as the degree of consensus among meas
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urers. ANSWER: True
wq wq
16. Assessment measures are not concerned with particular attributes of obj
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ects. ANSWER: False
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17. Prediction measures are concerned with factors that may be indicative of future cond
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itions. ANSWER: True
wq wq
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction m
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easures. ANSWER: False
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19. All accounting measurements are of either the assessment or the prediction v
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ariety. ANSWER: True
wq wq
3
, 20. The need for information on a timely basis may conflict with cost constraints in some sit
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uations. ANSWER: True
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21. The terms calculation and measurement both refer to the valuation of a real phenomena or a
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ttribute. ANSWER: False
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22. Calculations attempt to simulate or come as close as possible to the measurement of real pheno
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mena or attributes.
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ANSWER: False wq
23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rat
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her than measurements.
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ANSWER: True wq
24. There are often trade-
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offs between objectivity and the usefulness of numbers generated by the measurement process.
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ANSWER: True wq
25. Measurement is an integral part of accounting the
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ory. ANSWER: True
wq wq
26. Throughout the financial history of the United States, current value has been the accepted valuation sy
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stem for published financial statements.
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ANSWER: False wq
27. The discounted cash flow approach can be used to determine an objective measurement for most as
wq wq wq wq wq wq wq wq wq wq wq wq wq wq wq
sets and liabilities.
wq wq
ANSWER: False wq
28. A general price-
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level adjustment refers to the purchasing power of the monetary unitary unit relative to all goods and servic
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es in the economy.
wq wq wq
ANSWER: True wq
4
