Ch.3 Qualitative characteristics

1. 1Which concept is described in the following expression: 'the exercice of caution when making judgements under conditions of uncertainty'.

   1. ABusiness entity
   2. BMateriality
   3. CConsistency
   4. DPrudence
2. 2The Conceptual Framework identifies four enhancing qualitative characteristics of financial information. For which of these characteristics is disclosure of accounting policies particularly important?

   1. AVerifiability
   2. BTimeliness
   3. CComparability
   4. DUnderstandability
3. 3If a company is going to be liquidated, which of the following would apply in
   accordance with the Conceptual Framework?

   1. AFinancial statements do not need to be prepared.
   2. BFinancial statements should be prepared on going concern basis.
   3. CThe financial statements should be prepared on a different basis.
   4. DThe financial statements should be prepared on a liquidation basis.
4. 4Which of the following explains the value that relevant information contains?

   1. ACurrent value
   2. BFair value
   3. CConfirmatory value
   4. DHistoric value
5. 5Which description defines information that is relevant to users of financial information?

   1. AInformation that is free from error, bias and is a faithful representation of events
   2. BInformation that has been prudently prepared
   3. CInformation that is comparable from one period to the next
   4. DInformation that influences the decisions of users
6. 6Which of the following concepts refers to the use of the same methods for the same items?

   1. AComparability
   2. BRelevance
   3. CConsistency
   4. DMateriality
7. 7Which two of the following items are enhancing qualitative characteristics of useful
   financial information as stated in the IASB Framework?

   1. ARelevance
   2. BComparability
   3. CFaithful representation
   4. DVerifiability
8. 8Which of the following statements best explains the principle of faithful representation in
   relation preparation of the annual financial statements?

   1. ATransactions are presented any way that is considered appropriate.
   2. BTransactions are presented in such a way as to maximise profit for the year.
   3. CTransactions are presented in such a way to maximise asset values in the statement
      of financial position.
   4. DTransactions are presented to reflect their commercial substance of a transaction
      rather than their legal form.
9. 9Information must be complete, neutral and free from error. Which qualitative characteristics is defined in the description of infromation?

   1. ARelevance
   2. BFaithful representation
   3. CUnderstandability
   4. DVerifiability
10. 10In which of the following the qualities of information are placed correctly alongside the appropriate qualitative characteristic?

    1. ARelevance - predictive value and free from bias; Faithful representation - neutral
    2. BRelevance - free from error and complete; Faithful representation - predictive value
    3. CRelevance - predictive and confirmatory value; Faithful representation - materiality
    4. DRelevance - predictive and confirmatory value; Faithful representation - completeness

11. 11Understandability means that information should not be left out of financial statements simply due to their complexity
    

    1. ATrue
    2. BFalse

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Anar special Quiz on Ch.3 Qualitative characteristics , created by Anar Hasanov on 05/02/2020.

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Anar Hasanov

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