E. True or False:

1. The principal difference between two concepts of capital maintenance is the treatment of the

effects of changes in the prices of assets and liability of the entity.

2. The selection of the appropriate concept of capital by an entity should be based on the needs

of the users of its financial statements.

3. The concept of capital maintenance chosen by an entity shall determine the accounting model

used in the preparation of its financial statements.

4. The Conceptual Framework serves as a guide in developing future financial reporting

standards and in reviewing existing ones.

5. The Conceptual Framework is a source of guidance for determining an accounting treatment

where a standard does not provide specific guidance.

6. The Conceptual Framework does not in any was assist prepares of financial statements in

applying PFRS and in dealing with topics that have yet to form the subject of PFRS.

7. The Conceptual Framework is not a PFRS, and nothing in it overrides any specific PFRS,

including PFRS that is in some respect in conflict with the Conceptual Framework.

8. The GPFS show the results of the stewardship of the management for the resources entrusted

to it by the capital providers.

9. The GPFS are prepared at least annually and are directed to both the common and specific

information needs of a wide range of statement users.

10. The GPFS provide information about the financial position, performance and cash flows of an

enterprise that is useful to a wide range of users in making economic decisions.