3) Which of the following is not within the scope of the Conceptual Framework?

A. the objective of financial reporting

B. the quantitative characteristics of useful financial information

C. the definition, recognition and measurement of the elements from which financial statements are constructed

D. concepts of capital and capital maintenance

4) Which of the following statements is not true?

A. Accounting assumptions are the basic notions or fundamental premises on which the accounting process is

based.

B. Accrual used to be an underlying assumption in the old framework

C. Going concern is the sole underlying assumption in the new framework.

D. The use of historical cost is not supported by going concern assumption.

5) The following statements are true except,

A. General purpose financial statements are based on estimates and judgments rather than exact depictions.

B. General purpose financial reports are not designed to show the value of an entity.

C. The target users of general purpose financial reports are investors, creditors and lenders.

D. General purpose financial reports all the information needed by existing and potential investors, lenders and

other creditors needed.

6) Historical cost

A. The amount of cash or cash equivalent paid or the consideration to acquire an asset.

B. The amount of cash or cash equivalent that would have to be paid of the same or an equivalent asset is

acquired currently.

C. The amount of cash and cash equivalent that could currently be obtained by selling the asset in an orderly

disposal.

D. The discounted value of the future net cash inflow that an asset is expected to generate I the normal course of

business.

7) Under this concept, capital is regarded as the net assets or equity of the enterprise

A. Financial concept C. All-financial resources concept

B. Physical concept D. All-inclusive concept

8) When should an item that meets the definition of an element be recognized, according to the Framework?

A. When it is probable that any future economic benefit associated with the item will flow to or from the entity.

B. When the element has a cost or value that can be measured with reliability.

C. When the entity obtains control of the right or obligations associated with the item.

D. When it is probable that any future economic benefits associated with the item will flow to or from the entity

and the item has ac sot or value that can be measured with reliability.

9) What is the only underlying assumption mentioned in the new Conceptual Framework for Financial Reporting?

A. Going concern B. Time period

C. Accounting entity D. Monetary unit

10) Which statement relates to comparability?

A. Information is available to decision-makers in time to be capable of influencing their decisions.

B. Different knowledgeable and independent observers could reach consensus, although not necessarily

complete agreement, that a particular depiction is a faith representation.

C. Financial reports are prepared for users who have a reasonable knowledge of business and economic activities

and who review and analyze the information with diligence.

D. Enable users to identify and understand similarities in, and differences amount items.

11) The enhancing qualitative characteristics of financial information are

A. Comparability and understandability

B. Verifiability and timeliness

C. Comparability, understandability and verifiability

D. Comparability, understandability, verifiability and timeliness

12) Accounting information is considered to be relevant when it

A. Can be depended on to represent the economic conditions and events that it is intended to represent.

B. Is capable of making a difference in a decision.

C. In understandable by reasonably informed users of accounting information,

D. Is verifiable and neutral.