Accounting theory

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