Multiple Choice:

1. The idea of Free from bias represents the primary quality of :

a. Relevance

b. Verifiability.

c. Faithful representation

d. Neutrality.

2. According to the FASB conceptual framework, which of the following attributes would not be used to measure inventory?

a. Replacement cost.

b. Net realizable value.

c. Historical cost.

d. Present value of future cash flows.

2. In general, completed earnings process under revenue realization refers to ownership is transferred and :

a. production is completed.

b. a purchase order is received.

c. cash is collected.

d. physical substance is transferred.

4. On April 15,2013, Hank, one of Exxon Corporations investors concluded that the

2013 Research and Development Costs will increase 15% based on the 2012 R &D listed in the Exxons financial Statements. This implies the Exxons financial statements has the following value?

a. Predictive Value.

b. Feedback Value.

c. Confirmatory Value.

d. Timeliness Value.

Scenario Analysis

Davis, an entry-level controller, decreased the valuation of all assets and liabilities of the financial statements by 10% because he thought the purchasing power of the dollar is decreasing.

Do you agree or disagree? Briefly the reason for your answer