Far660 (History of accounting)

1.1 Introduction

The study of the history and development of accounting is to an understanding and appreciation of prevent fraud as well as of the institutional structure of the discipline.

• True

• False

1.2 Early history of accounting

A.C Littleton has already lists seven preconditions for the emergence of the systematic bookkeeping. Choose the correct preconditions for the emergence of the systematic bookkeeping.

I. Commerce

II. Private property

III. Equities

IV. Capital

• I and II

• II and III

• I, II and IV

• All the above

1.2.3 Development of double-entry bookkeeping.

State the existence of the following depreciation methods that provided by Saliero in 1915.

I. Straight line and reducing method

II. Straight line and sinking fund

III. Annuity method and unit cost method

IV. Reducing and sinking fund

• I and III

• II and IV

• I, II and III

• All the above

1.3 The development of accounting principles in the USA

There are several phases of development accounting principle and theory in USA except

• Management Contribution Phase

• Institution Contribution Phase

• Politicization Practice Phase

• Professional Contribution Phase

(1.3.1 Management Contribution Phase (1900-1933)

“The diffusion of stock ownership gave management incomplete control over the format and content of accounting disclosures”

Is the statement above true?

• True

• False

(1.3.1 Management Contribution Phase (1900-1933)

One of the consequences of dependence of management initiative is

• No flexibility of alternative management treatments

• The techniques adopted were motivated by the desire to smooth earnings

• Complex problems were achieved and no strategic solutions applied

• The focus was on the determination of management income and minimization taxes

(1.3.2 Institution Contribution Phase (1933-1959)

Under institution contribution phase, committee on Accounting Procedure was set up in 1938 to include unquestionable accounting treatment and focus on reporting problem.

Is the statement above true?

• True

• False

(1.3.3 Professional contribution phase (1959-73)

What are the consequences on depending on such A&A ( Assosiation & Agencies)

i. The framework was will not be establish according to the act

ii. Authority of statements was not clear-cut

iii. Flexibility on accounting techniques still exist allowing alternative treatment

iv. A&A did not rely on such establish theoretical framework

• i,iii

• ii,iii, iv

• i,ii,iii

• All of the above

(1.3.3 Professional contribution phase (1959-73)

These are what ASB, found itself embattled and criticized for. EXCEPT FOR

• Random opinion including APB 8 on pension accouting

• APB 11 on income tax allocation & APB 3& 2 on tax credit

• APB 11 on income tax allocation & APB 2 & 4 on investment tax credit

• Fail to solve problem of accounting for business combination and goodwill

( 1.3.4 Politicization phase ( 1973-present) )

Under Politicization Phase, Financial Accounting Standard Board (FASB) was established by adopted deductive ________ to the formulation of accounting standard.

• quasi – political

• modern – political

• substantive – political

• sampling - political