$5.00 Financial reporting
Which of the following statements is not true with regard to the benefits derived from the FASB's conceptual framework of accounting? (Points: 2)
It serves as a guide in establishing standards for the FASB.
The Statements of Financial Accounting Concepts is the primary source of GAAP for accountants.
It establishes the objectives of financial reporting.
It enhances comparability between different companies' financial statements.
2. Information about comprehensive income is useful to external users for all of the following purposes except (Points: 2)
evaluating management’s performance
examining cash flows for the current period
predicting future income
assessing the risk of lending to the company
3. Accrual accounting relates the financial effects of a company’s transactions (Points: 2)
so that the costs of non-operating events are matched to the balance sheet in the period impacted
to the period in which they occur rather than to when the cash receipts or payment occurs
so that the revenue impact of every transaction in a period is properly reflected in the income statement
so that the impact of every transaction is reflected in the statement of cash flows
4. Which of the following statements regarding financial flexibility is true? (Points: 2)
It is the ability of a company to provide a return on investment.
It is the ability of a company to take effective actions to insure the return of capital to the company.
It is the ability of a company to take effective actions to change the amounts and timing of cash flows.
It is the ability of a company to maintain a given level of operations.
5. Which of the following qualitative characteristics may have to be sacrificed in order to achieve timeliness? (Points: 2)
6. The framework for the model of business reporting includes all of the following except (Points: 2)
financial and nonfinancial data
independent analysis of the financial data
information about management and shareholders
7. The IASB and FASB boards have agreed that the objective of general purpose financial reporting is to provide (Points: 2)
financial information about a company that is useful to external users in making decisions in their capacity as capital providers
mainly cash flow information about a company that is useful to external users in making decisions in their capacity as capital providers
financial information about a company that is useful to internal users in making decisions in their capacity as capital custodians
financial information about a company that is useful to government regulators in making decisions in their capacity as capital markets monitors
8. The IASB and FASB joint boards feel that financial reporting should (Points: 2)
be general purpose
be useful in assessing a company’s future cash flows
provide information on an accrual basis
all of these are true
9. The IASB and FASB joint boards have identified the primary user groups of financial information as all of the following except (Points: 2)
other creditors (capital providers)
10. The joint IASB/FASB qualitative characteristics Exposure Draft identifies a logical order in which to evaluate the qualities. That order (first, second, third) is (Points: 2)
faithful representation, relevance, enhancing characteristics
relevance, enhancing characteristics, faithful representation
relevance, faithful representation, enhancing characteristics
enhancing characteristics, relevance, faithful representation