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This document contains 25 multiple choice questions that test knowledge of key accounting concepts such as financial vs managerial accounting, users of accounting information, qualitative characteristics of useful financial information, accounting assumptions and principles, and revenue recognition. The questions cover topics like identification of users, evaluation of true/false statements, and identification of the concepts being described.
Исходное описание:
Exercises in Finance 12, Financial Reporting and Analysis
This document contains 25 multiple choice questions that test knowledge of key accounting concepts such as financial vs managerial accounting, users of accounting information, qualitative characteristics of useful financial information, accounting assumptions and principles, and revenue recognition. The questions cover topics like identification of users, evaluation of true/false statements, and identification of the concepts being described.
This document contains 25 multiple choice questions that test knowledge of key accounting concepts such as financial vs managerial accounting, users of accounting information, qualitative characteristics of useful financial information, accounting assumptions and principles, and revenue recognition. The questions cover topics like identification of users, evaluation of true/false statements, and identification of the concepts being described.
preparation and presentation of general purpose reports known as financial statements. 2. True or False.
Managerial accounting is the area of accounting that emphasizes developing accounting information for use within an entity. 3. Identification.
These users are interested in the allocation of resources and activities of enterprises, and therefore require information to regulate the activities of enterprises, determine taxation policies and as a basis for national income and similar statistics. 4. Identification.
These users require information on risk and return provided by their investment. 5. Identification.
These users are interested in information about the profitability and stability of the entity in order to assess the ability of entity to provide remuneration and retirement benefits. 6. Identification.
These users are interested in information that enables them to assess whether their loans, the related interest, and amounts owing to them will be paid when due. 7. Identification.
These users are interested in information about the continuance of an entity, especially when they have a long-term involvement with or are dependent on the entity. 8. Identification.
These users need information on trends and recent developments where an entity makes a substantial contribution to the local economy providing employment and using local suppliers. 9. True or False.
Financial accounting is the area of accounting that emphasizes reporting primarily to creditors and investors. 10. Identify the characteristic of a useful information that is being described.
Preparers of statements should not try to increase the usefulness of the information to a few users to the detriment of others who may have opposing interests. 11. Identify the characteristic of a useful information that is being described.
The description and numbers or figures must watch what really existed or happened. 12. Identify the characteristic of a useful information that is being described.
The older the information, the less useful. 13. Identify the characteristic of a useful information that is being described.
It requires that users have some knowledge of the complex economic activities of entities, the accounting process and the technical terminology in the statements. 14. Identify the characteristic of a useful information that is being described.
It is the ability to bring together for the purpose of noting points of likeness and differences. 15. Identify the characteristic of a useful information that is being described.
The financial statements should be accompanied by notes to the financial statements. 16. Identify the characteristic of a useful information that is being described.
This implies consensus. 17. True or False
To be faithfully represented, an information must be predictive and confirmatory. 18. Identify the convention/assumption that is being described or violated.
The owners of a five star hotel base its accounting records on the assumption that the hotel might close any time. 19. Identify the convention/assumption that is being described or violated.
This assumption is used as basis for preparing financial statements at regular artificial points in time. 20. Identify the convention/assumption that is being described or violated.
When in doubt, recognize all losses and dont recognize gains. 21. Identify the convention/assumption that is being described or violated.
An entity records sales after inventory has been produced but before it is sold. 22. Identify the convention/assumption that is being described or violated.
An accounting practitioner mixes his personal accounting records with his accounting practice. 23. Identify the convention/assumption that is being described or violated.
An entity reports property, plant and equipment at current cost at the end of reporting period. 24. Identify the convention/assumption that is being described or violated.
Associating effort with accomplishment. 25. Fill in the blank.
Generally, recognition criteria are met and revenue is recognized at _____. Ans: TRUE 1. True or False.
Financial accounting focuses on the preparation and presentation of general purpose reports known as financial statements. Ans: TRUE 2. True or False.
Managerial accounting is the area of accounting that emphasizes developing accounting information for use within an entity. Ans: Government 3. Identification.
These users are interested in the allocation of resources and activities of enterprises, and therefore require information to regulate the activities of enterprises, determine taxation policies and as a basis for national income and similar statistics. Ans: Equity investor group 4. Identification.
These users require information on risk and return provided by their investment. Ans: Employees 5. Identification.
These users are interested in information about the profitability and stability of the entity in order to assess the ability of entity to provide remuneration and retirement benefits. Ans: Loan creditor group 6. Identification.
These users are interested in information that enables them to assess whether their loans, the related interest, and amounts owing to them will be paid when due. Ans: Customers 7. Identification.
These users are interested in information about the continuance of an entity, especially when they have a long-term involvement with or are dependent on the entity. Ans: Public 8. Identification.
These users need information on trends and recent developments where an entity makes a substantial contribution to the local economy providing employment and using local suppliers. Ans: TRUE 9. True or False.
Financial accounting is the area of accounting that emphasizes reporting primarily to creditors and investors. Ans: Neutrality/Objectivity 10. Identify the characteristic of a useful information that is being described.
Preparers of statements should not try to increase the usefulness of the information to a few users to the detriment of others who may have opposing interests. Ans: Faithful Rrepresentation or Reliability 11. Identify the characteristic of a useful information that is being described.
The description and numbers or figures must watch what really existed or happened. Ans: Timeliness 12. Identify the characteristic of a useful information that is being described.
The older the information, the less useful. Ans: Understandability 13. Identify the characteristic of a useful information that is being described.
It requires that users have some knowledge of the complex economic activities of entities, the accounting process and the technical terminology in the statements. Ans: Comparability 14. Identify the characteristic of a useful information that is being described.
It is the ability to bring together for the purpose of noting points of likeness and differences. Ans: Completeness 15. Identify the characteristic of a useful information that is being described.
The financial statements should be accompanied by notes to the financial statements. Ans: Verifiability 16. Identify the characteristic of a useful information that is being described.
This implies consensus. Ans: FALSE 17. True or False
To be faithfully represented, an information must be predictive and confirmatory. Ans: Going concern or Continuity 18. Identify the convention/assumption of a that is being described or violated.
The owners of a five star hotel base its accounting records on the assumption that the hotel might close any time. Ans: Accounting period or Periodicity 19. Identify the convention/assumption of a that is being described or violated.
This assumption is used as basis for preparing financial statements at regular artificial points in time. Ans: Prudence or Conservatism 20. Identify the convention/assumption of a that is being described or violated.
When in doubt, recognize all losses and dont recognize gains. Ans: Revenue Recognition / Realization 21. Identify the convention/assumption of a that is being described or violated.
An entity records sales after inventory has been produced but before it is sold. Ans: Business entity 22. Identify the convention/assumption of a that is being described or violated.
An accounting practitioner mixes his personal accounting records with his accounting practice. Ans: Cost principle 23. Identify the convention/assumption of a that is being described or violated.
An entity reports property, plant and equipment at current cost at the end of reporting period. Ans: Matching principle 24. Identify the convention/assumption of a that is being described or violated.
Associating effort with accomplishment. Ans: point of sale 25. Fill in the blank.
Generally, recognition criteria are met and revenue is recognized at _____.