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)
       relevance
       reliability
       comparability
       predictive value


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
       forward-looking information
       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)
       equity investors
       labor groups
       lenders
       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