TRUE-FALSEConceptual

1. A conceptual framework is a coherent system of concepts that flow from an objective.

2. A soundly developed conceptual framework enables the International Accounting Standards Board (IASB) to issue more useful and consistent pronouncements over time.

3. The first level of the conceptual framework identifies the recognition and measurement concepts used in establishing accounting standards.

4. Decision usefulness is the underlying theme of the conceptual framework.

5. Relevance and faithful representation are the two fundamental qualities that make accounting information useful for decision making.

6. Timeliness and neutrality are two ingredients of relevance.

7. Verifiability and predictive value are two ingredients of faithful representation.

8. The second level of the International Accounting Standards Boards (IASBs) Conceptual Framework serves as a bridge between the why of accounting and the how of accounting.

9. Comparability is an enhancing quality as described by the International Accounting Standards Boards (IASBs) Conceptual Framework.

10. The IASB conceptual framework specifically identifies accrual basis accounting as one of its fundamental assumptions.

MULTIPLE CHOICEConceptual

1. A soundly developed conceptual framework of concepts and objectives should

a. increase financial statement users understanding of and confidence in financial reporting.

b.enhance comparability among companies financial statements.

c.allow new and emerging practical problems to be more quickly solved.

d.All of these answers are correct.

2. Which of the following is not true concerning a conceptual framework in accounting?

a. It should be a basis for standard-setting.

b.It should allow practical problems to be solved more quickly by reference to it.

c.It should be based on fundamental truths that are derived from the laws of nature.

d.All of these answers are correct.

3. What is a purpose of having a conceptual framework?

a.To make sure that economic activity can be identified with a particular legal entity.

b.To segregate activities among competing companies.

c.To provide comparable information for different companies.

d.To enable the profession to more quickly solve emerging practical problems and to provide a foundation from which to build more useful standards

4. In the conceptual framework for financial reporting, what provides the whythe purpose of accounting?

a.Recognition, measurement, and disclosure concepts such as assumptions, principles, and constraints

b.Qualitative characteristics of accounting information

c.Elements of financial statements

d.Objective of financial reporting

5. The underlying theme of the conceptual framework is

a.decision usefulness.

b.understandability.

c.faithful representation.

d.comparability

6. The International Accounting Standards Boards (IASBs) Conceptual Framework includes all of the following except

a.Objective of financial reporting.

b.Supplementary information

c.Elements of financial statements.

d.Qualitative characteristics of accounting information

7. The second level in the International Accounting Standards Boards (IASBs) Conceptual Framework

a.Identifies the objective of financial reporting.

b.Identifies recognition, measurement, and disclosure concepts used in establishing and applying accounting standards.

c.Provides the elements of financial statements.

d.Includes assumptions, principles, and constraints

8. The overriding criterion by which accounting information can be judged is that of

a. usefulness for decision making.

b.freedom from bias.

c.timeliness.

d.comparability.

9. Which of the following is an ingredient of relevance?

a.Verifiability.

b.Timeliness.

c.Predictive value.

d.Neutrality.

10. Which of the following is an ingredient of faithful representation?

a.Predictive value.

b.Materiality.

c.Neutrality.

d.Confirmatory value.