What are the Statements of Financial Accounting Concepts intended to establish?
The objectives and concepts for use in developing standards of financial accounting and reporting
During the lifetime of an entity, accountants produce financial statements at arbitrary moments in time in accordance with which basic accounting concept?
Periodicity
Continuation of an accounting entity in the absence of evidence to the contrary is an example of the basic concept of
Going concern
Reporting inventory at the lower of cost or market (LCM) is a departure from the accounting principle of
Historical Cost
According to the FASB's conceptual framework, the objective of general-purpose financial reporting is most likely based on
the needs of the users of the information
which of the following best reflects the objective of general-purpose financial reporting?
Investment and credit decisions often are based at least in part on evaluations of the past performance of an entity.
Which of the following is a true statement about the objective of general-purpose financial reporting?
The information provided relates to the entity's economic resources and claims
Which of the following is least likely to be accomplished by providing general-purpose financial information useful for making decisions about providing resources to an entity?
To provide sufficient information to determine the value of the entity.
Determining periodic earnings and financial position depends on measuring economic resources and obligations and changes in them as these changes occur. This explanation pertains to
accrual accounting
According to the FASB's conceptual framework, the two fundamental qualitative characteristics that make accounting information useful for decision making are
relevance and faithful representation
According to the FASB's conceptual framework, neutrality relates to
Faithful representation, not relevance
According to the FASB conceptual framework, which of the following correctly pairs a fundamental qualitative characteristic of useful financial information with one of its aspects.
relevance and materiality
Which of the following is considered a pervasive constraint by the FASB's conceptual framework?
cost
According to Statements of Financial Accounting Concepts predictive value relates to
relevance and not faithful representation
According to the FASB's conceptual framework, what does the concept of faithful representation in financial reporting include?
neutrality
According to the FASB's conceptual framework the usefulness of providing information in financial statements is subject to the constraint of
cost
According to the FASB's conceptual framework, which of the following most likely does not violate the concept of faithful representation?
Report data on segments having the same expected risks and growth rates to analysts estimating future profits.
Under SFAC 8, the ability, through consensus among measurers, to ensure that information represents what it purports to represent is an example of the concept of
verifiability
according to the FASB's conceptual framework, which of the following enhances information that is relevant and faithfully represented?
comparability
which of the following accounting concepts states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified individuals to arrive at essentially similar measure and conclusions?
Verifiability
Financial information is most likely to be verifiable when an accounting transaction occurs that
involves an arm's length transaction between two independent interests
The concept of consistency is sacrificed in the accounting for which of the following income statement items?
change in accounting principle when the cumulative effect on any prior period is not known
according to the FASB's conceptual framework, the quality of information that enables users to identify similarities in and differences between two sets of economic phenomena is
comparability
According to the FASB's conceptual framework, the quality of information that helps users increase the likelihood of correctly forecasting the outcome of past or present events is called
predictive value
To be relevant, financial information should have which of the following
confirmatory value
which of the following characteristics relates to both accounting relevance and faithful representation?
Verifiability, Timeliness, & comparability
According to the FASB's conceptual framework, which of the following is an essential characteristic of an asset?
An asset provides future benefits
Under SFAC No. 6, Elements of Financial Statements, interrelated elements of financial statements include
distribution to owners NOT notes to financial statements
According to the FASB's conceptual framework, which of the following is an essential characteristic of a liability?
Liabilities represent an obligation that has arisen as the result of a previous transaction
According to the FASB's conceptual framework, asset valuation accounts are
neither assets nor liabilities
A stated purpose of SFAC 6, elements of financial statements is to
define the elements necessary for presentation of financial statements of both businesses and not-for-profit entities
which of the following statements about accrual accounting is false?
accrual accounting primarily addresses the cash receipts and cash payments of an entity
according to the FASB's conceptual framework, an entity's revenue may result from an
decrease in a liability from primary operations
according to the FASB's conceptual framework, which of the following best describes the distinction between expenses and losses?
losses result from peripheral or incidental transactions and expenses result from ongoing major or central operations of the entity
The FASB's conceptual framework explains both the financial and physical capital maintenance concepts. Which capital maintenance concept is applied to currently reported net income, and which is applied to comprehensive income?
Financial capital applied to both currently reported net income and comprehensive income
The primary purpose of the statement of financial position of a business is to reflect
items of value, debts, and net worth
consolidated financial statements are prepared when a parent-subsidiary relationship exists in recognition of the accounting concept of
entity
1.7 Arpco Inc a for-profit provider of the healthcare services, recently purchased two smaller companies and is researching accounting issues arising from the two business combinations. which of the following accounting pronouncements are the most authori
the accounting standards codification
which of the following documents is typically issued as part of the due-process activities of the FASB for amending the FASB accounting standards codification.
a proposed accounting standards update
1.8 which of the following statements is correct concerning corporations subject to the reporting requirements of the Securities Exchange act of 1934
a report (form 8-k) must be filed with the SEC after a material important event occurs
integral corp. is subject to the reporting provisions of the Securities Exchange Act of 1934. For its current fiscal year, Integral filed the following with the SEC: quarterly reports an annual report and a periodic report listing newly appointed officers
file the periodic report listing newly appointed officers