Question 1. Why was it believed that accounting standards issued by the Financial Accounting Standards Board (FASB) would carry more weight?

a The FASB has small membership.

b The FASB board members are well paid.

c The FASB board members must be CPAs.

d The FASB engages in due process.

Question 2 (1 point) Information is neutral if it __________.

a provides benefits that are at least equal to the costs of its preparation

b can be compared with similar information about an enterprise at other points in time

c would have no impact on a decision

d is free from bias toward a predetermined result

Question 3 (1 point) Which of the following is of interest to investors in decision making?

a assessing the companys ability to generate net cash inflows

b assessing managements ability to protect and enhance the capital providers investments

c both assessing the companys ability to generate net cash inflows and assessing managements ability to protect and enhance the capital providers investments

d assessing the companys ability to collect debts

Question 4 (1 point) Which of the following is not a major challenge facing the accounting profession?

a nonfinancial measurements

b timeliness

c accounting for hard assets

d forward-looking information

Question 5 (1 point) __________means that the numbers and descriptions match what really existed or happened.

a Relevance

b Faithful representation

c Completeness

d Neutrality

Question 6 (1 point) All of the following show the differences between how accounting information is used in financial and managerial accounting except __________.

a planning and controlling the company's operations

b deciding whether to invest in the company

c evaluating the borrowing capacity to determine the extent of a loan to grant

d all the above

Question 7 (1 point) Which of the following is an overall limitation of "general purpose financial statements?

a General purpose financial statements may not be the most informative for a specific enterprise.

b General purpose financial statements are comparable.

c General purpose financial statements are assumed to present fairly the company's financial operations.

d none of the above

Question 8 (1 point) What is a purpose of having a conceptual framework?

a A conceptual framework enables the profession to solve emerging practical problems quickly.

b A conceptual framework provides a foundation upon which to build more useful standards.

c Neither a nor b are true.

d Both a and b are true.

Question 9 (1 point) The information provided by financial reporting pertains to __________.

a individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers

b business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers

c individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers

d an economy as a whole and to members of society as consumers, rather than to individual enterprises or industries

Question 10 (1 point) Which of the following is related to an effective capital allocation?

a promoting productivity

b encouraging innovation

c providing an efficient market for buying and selling securities

d all of the above Submit