Generally accepted accounting principles
have been specified in detail in the FASB conceptual framework
Derive their credibility and authority from general recognition and acceptance by the accounting profession.
The conceptual framework for financial reporting consists of how many levels
3
4
Which of the following statements is true regarding the convergence project by the FASB and IASB?
The converged framework will be a series of documents, similar to the two conceptual frameworks that presently exist.
The IASB framework makes two assumptions
In the conceptual framework for financial reporting, what provides "the how" - the implementation of accounting?
A measurement and cognition concepts such as assumptions, principles, and constraints
qualitative characteristics of accounting information.
The underlying theme of the conceptual framework is decision usefulness
For information to be relevant, it must have both predictive value and confirmatory value?
Enhancing qualities of accounting information include
Comparability and verifiability
Relevance and faithful representation.
Enhancing quailities of accounting information include all of the following except
comparability
understandability
neutrality
timeliness
In order to be relevant, financial information must have
confirmatory or predictive value
The change in net assets during a period from transactions and other events and circumstances from non-owner sources is called
revenues
comprehensive income
an increase in net assets arising from peripheral or incidental transactions is called a(n)
gain
investment by owner
Under current GAAP, inflation is ignored in accounting due to
consistency
the monetary unit assumption
The periodicity assumption specifies that the most appropriate time periods for financial reporting are weekly, bi-monthly, and yearly
Depreciation and amortization policies are justifiable and appropriate because of the
economic entity assumption
going concern assumption
A contract is an agreement between two parties that creates enforceable rights or obligations
Generally, revenues are recognized when the
product is produced
performance obligation has been satisfited
Which of the following statements about the fair value principle is true.
Fair value is generally less relevant than historical cost
Fair value is a market-based measure
The difficulty in cost benefit analysis is that the benefits are usually evident and measurable, while the costs are not always evident or measurable.
The existing conceptual frameworks underlying IFRS and GAAP are strikingly different and the FASB and ISAB will likely change many aspects of each of the frameworks in order to create a common conceptual framework.
