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11- The capital maintenance perspective that considers the changes in the real value of the currency unit is: A- Financial capital maintenance B- Purchasing power

11- The capital maintenance perspective that considers the changes in the real value of the currency unit is:

A- Financial capital maintenance

B- Purchasing power maintenance

C- Physical capital maintenance

D- None of the above

12- The accounting alternative method that adjusts the historical cost accounting numbers, is called:

A-Current purchasing power accounting

B- General price level accounting

C- Current cost accounting

D- A and B

13- Which of the following is monetary asset:

A- Cash

B- Inventory

C- Buildings

D- Lands

14- If the company has more monetary assets than monetary liabilities, then, in the periods of inflation, the company will have:

A- Gain

B- Loss

C- No gain, no loss

D- A and B

15- The accounting method that differentiates between trading profits and holding gains, is:

A-Current purchasing power accounting

B- General price level accounting

C- Current cost accounting

D- Historical cost accounting

16- Limitations of historical cost accounting enhance the need for:

A- Accounting for changing prices

B- International accounting

C- Accounting for income tax

D- The conceptual framework of accounting

17- The two primary qualities that make accounting information useful for decision making are

A- Comparability and consistency

B- Materiality and timeliness.

C- Relevance and reliability.

D- Reliability and comparability.

18- Advantages of development of conceptual framework include, except:

A- Enhancing the consistency of accounting standards

B- More compatible accounting standards

C- Alleviating political pressure

D- Reducing the decision usefulness role of financial reports

19- David (1998) implemented a research to investigate the relationship between earnings manipulation and borrowing orientation; such research is:

A- Explanatory theory research

B- True income theory research

C- Positive theory research

D- Decision makers theory research

E- Both A & C are correct answers

20- Flora Guidry, Andrew J. Leone, and Steve Rock (1999) tests the bonus-maximization hypothesis that managers make discretionary accrual decisions to maximize their short-term bonuses, such theorizing should be classified as:

A-Bonus plan theory

B-Debt theory

C-Political cost theory

D-True income theory

21- Lan Sun (2012) sheds light in explaining contractual incentives and provides useful information in understanding the executive compensation contract-driven earnings management behavior, such theorizing should be classified as:

A-Bonus plan theory

B-positive accounting theory

C-Political cost theory

D- A & B

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