accounting exam 2 Questions and
Answers Updated 2026
What is the primary accounting standard-setting body in the United States? - AnswerFinancial
Accounting Standards Board
What are generally accepted accounting principles? - AnswerA set of accounting rules and practices
that have authoritative support
Which of the following is not a fundamental quality of useful accounting information? -
AnswerVerifiability
Generally accepted accounting principles - Answerare accounting rules that are recognized as a
general guide for financial reporting.
Which one of the following is not an enhancing quality of useful information? - AnswerMateriality
The two fundamental qualities of useful information are - Answerrelevance and faithful
representation.
The quality of consistency enhances - Answercomparability.
Accounting information should be verifiable in order to enhance - Answerfaithful representation.
The assumption which requires that only those things that can be expressed in money be included in
the accounting records is the - Answermonetary unit assumption.
It is assumed that the activities of Ford Motor company can be distinguished from those of General
Motors because of the - Answereconomic entity assumption.
The Sheffield Company has five plants nationwide that cost $320 million. The current fair value of the
plants is $530 million. The plants will be reported as assets at - Answer$320 million
Receipt of an unearned revenue - Answerincreases an asset; increases a liability.
Answers Updated 2026
What is the primary accounting standard-setting body in the United States? - AnswerFinancial
Accounting Standards Board
What are generally accepted accounting principles? - AnswerA set of accounting rules and practices
that have authoritative support
Which of the following is not a fundamental quality of useful accounting information? -
AnswerVerifiability
Generally accepted accounting principles - Answerare accounting rules that are recognized as a
general guide for financial reporting.
Which one of the following is not an enhancing quality of useful information? - AnswerMateriality
The two fundamental qualities of useful information are - Answerrelevance and faithful
representation.
The quality of consistency enhances - Answercomparability.
Accounting information should be verifiable in order to enhance - Answerfaithful representation.
The assumption which requires that only those things that can be expressed in money be included in
the accounting records is the - Answermonetary unit assumption.
It is assumed that the activities of Ford Motor company can be distinguished from those of General
Motors because of the - Answereconomic entity assumption.
The Sheffield Company has five plants nationwide that cost $320 million. The current fair value of the
plants is $530 million. The plants will be reported as assets at - Answer$320 million
Receipt of an unearned revenue - Answerincreases an asset; increases a liability.
