C. creating a fi ctitious asset.

Chapter 3

1. Which of the following is not an objective of fi nancial statements as expressed by the

International Accounting Standards Board?

A. To provide information about the performance of an entity

B. To provide information about the fi nancial position of an entity

C. To provide information about the users of an entity ’ s fi nancial statements

2. International accounting standards are currently developed by which entity?

A. Financial Services Authority

B. International Accounting Standards Board

C. International Accounting Standards Committee

3. U.S. Financial Accounting Standards are currently developed by which entity?

A. U.S. Congress

B. Financial Services Authority

C. Financial Accounting Standards Board

4. The SEC requires which of the following be issued to shareholders before a shareholder

meeting?

A. Form 10 - K

B. Statement of cash fl ow

C. Proxy statement

5. According to the Framework for the Preparation and Presentation of Financial Statements ,

which of the following is a qualitative characteristic of information in fi nancial

statements?

A. Accuracy

B. Timeliness

C. Comparability

6. Which of the following is not a constraint on the fi nancial statements according to the

IFRS Framework?

A. Timeliness

B. Understandability

C. Benefi t versus cost

7. The assumption that an entity will continue to operate for the foreseeable future is

called

A. accrual basis.

B. comparability.

C. going concern.

8. The assumption that the effects of transactions and other events are recognized when

they occur, not necessarily when cash movements occur, is called

A. accrual basis.

B. going concern.

C. relevance.

9. Neutrality of information in the fi nancial statements most closely contributes to which

qualitative characteristic?

A. Relevance

B. Reliability

C. Comparability

10. Does fair presentation entail full disclosure and transparency?

Full Disclosure Transparency

A. No Yes

B. Yes No

C. Yes Yes

11. Valuing assets at the amount of cash or equivalents paid, or the fair value of the consideration

given to acquire them at the time of acquisition, most closely describes which

measurement of fi nancial statement elements?

A. Current cost

B. Realizable cost

C. Historical cost

12. The valuation technique under which assets are recorded at the amount that would be

received in an orderly disposal is

A. current cost.

B. present value.

C. realizable value.

13. Which of the following is not a required fi nancial statement according to IAS No. 1?

A. Income statement

B. Statement of changes in equity

C. Statement of changes in income

14. Which of the following elements of fi nancial statements is most closely related to measurement

of performance?

A. Assets

B. Expenses

C. Liabilities

15. Which of the following elements of fi nancial statements is most closely related to measurement

of fi nancial position?

A. Equity

B. Income

C. Expenses

16. Which of the following is not a characteristic of a coherent fi nancial reporting

framework?

A. Timeliness

B. Consistency

C. Transparency

17. In the past, the Financial Accounting Standards Board has been criticized as having

Date: 2016-03-03; view: 1103