Question # $16-$ Which of the following are considered secondary characteristics of accounting

information?

a$.$ Verifiability and feedback value

b$.$ Predictive value and timeliness

c$.$ Comparability and consistency

d$.$ Representational faithfulness and neutrality

Question # $17-$ Which of the following items would be a violation of materiality?

a$.$ A company did not separately report an unusual gain of $$50,000.$ Its income from

operations was $$5,000,000$

b$.$ A company expensed the purchase of pencil sharpeners that have an estimated

useful life of three years

c$.$ $$25,000$ illegal bribe to a foreign official was not separately disclosed in the annual

report

d$.$ a $$5,000$ expenditure to improve a building that originally cost $$5,000,000$ was

expensed

Question # $18-$ Revenue may be recognized by an entity at the completion of production

during an accounting period:

a$.$ Only if full payment was received from the buyer before production began

b$.$ When no specific point of sale can be identified

c$.$ When there is a fixed selling price, and there are no limitations on the amount that can

be sold

d$.$ When collectability is highly uncertain

Question # $19-$ Which one of the following assumptions or principles most logically supports

the preparation of a single set of consolidated financial statements that combine the financial

information of several wholly$-$owned but separately$-$identifiable businesses?

a$.$ Historical cost

b$.$ Industry practices

c$.$ Entity

d$.$ Mate