Acct 301 exam 1 practice 100% SOLUTION PASS

Acct 301 exam 1 practice 100% SOLUTION PASS Which of the following is not a benefit associated with the FASB Conceptual Framework Project? a. A conceptual framework should increase financial statement users' understanding of and confidence in financial reporting. b. Practical problems should be more quickly solvable by reference to an existing conceptual framework. c. A coherent set of accounting standards and rules should result. d. Business entities will need far less assistance from accountants because the financial reporting process will be quite easy to apply. - ANSWER D Generally accepted accounting principles a. are fundamental truths or axioms that can be derived from laws of nature. b. derive their authority from legal court proceedings. c. derive their credibility and authority from general recognition and acceptance by the accounting profession. d. have been specified in detail in the FASB conceptual framework. - ANSWER C A soundly developed conceptual framework of concepts and objectives should a. increase financial statement users' understanding of and confidence in financial reporting. b. enhance comparability among companies' financial statements. c. allow new and emerging practical problems to be more quickly solved. d. All of these answer choices are correct. - ANSWER D What is a purpose of having a conceptual framework? a. To make sure that economic activity can be identified with a particular legal entity. b. To segregate activities among different companies. c. To provide comparable information for different companies. d. To enable the profession to more quickly solve emerging practical problems and to provide a foundation from which to build more useful standards. - ANSWER D Which of the following is not true concerning a conceptual framework in accounting? a. It should be a basis for standard-setting. b. It should allow practical problems to be solved more quickly by reference to it. c. It should be based on fundamental truths that are derived from the laws of nature. d. All of these answer choices are true. - ANSWER C In the conceptual framework for financial reporting, what provides "the why"--the purpose of accounting? a. Recognition, measurement, and disclosure concepts such as assumptions, principles, and constraints b. Qualitative characteristics of accounting information c. Elements of financial statements d. Objective of financial reporting - ANSWER D The underlying theme of the conceptual framework is a. decision usefulness. b. understandability. c. faithful representation. d. comparability. - ANSWER A The objective of general-purpose financial reporting is to provide financial information about a reporting entity to each of the following except a. potential equity investors. b. potential lenders. c. present investors. d. All of these answers are correct. - ANSWER D The objective of general-purpose financial reporting is? a. to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions in their capacity as capital providers b. to provide companies with the option to select information that favors one set of interested parties over another c. to provide users with financial information that implies total freedom from error. d. to provide a metric for financial information used to determine when the boundary between two or more entities should be disregarded and the entities considered to be a licensing arrangement. - ANSWER A If the LIFO inventory method was used last period, it should be used for the current and following periods because of a. consistency. b. materiality. c. timeliness. d. verifiability. - ANSWER A Which of the following is a characteristic describing the fundamental quality of relevance? a. Predictive value. b. Neutrality. c. Verifiability. d. Understandability - ANSWER A Which of the following is a fundamental quality of useful accounting information? a. Comparability b. Relevance c. Neutrality d. Materiality - ANSWER B Which of the following is a fundamental quality of useful accounting information? a. Conservatism b. Comparability c. Faithful representation d. Consistency - ANSWER C What is meant by comparability when discussing financial accounting information? a. Information has predictive or confirmatory value. b. Information is reasonably free from error. c. Information is measured and reported in a similar fashion across companies. d. Information is timely. - ANSWER C What is meant by consistency when discussing financial accounting information? a. Information presented by a company applies the same accounting treatment to similar events, from period to period. b. Information is timely. c. Information is classified, characterized, and presented clearly and concisely. d. Information is verifiable. - ANSWER A Which of the following is an ingredient of relevance? a. Completeness