Pertemuan 2

The underlying theme of the conceptual framework is

• Decision Usefulness

• Understandability

• Faithful Representation

• Comparability

Which of the following relates to both relevance and faithful representation?

• Cost Constraint

• Predictive Value

• Verifiability

• Neutrality

In matters of doubt and great uncertainty, accounting issues should be resolved by choosing the alternative that has the least favorable effect on net income, assets, and owners' equity. This guidance comes from

• the cost constraint

• the industry practices constraint

• prudence or conservatism

• the full disclosure principle

An implicit assumption of the International Accounting Standards Board’s (IASB’s) Conceptual Framework is that

• Information must be decision-useful to all potential users of financial reporting

• General-purpose financial reporting is the primary source of information for users of financial reporting

• Users need reasonable knowledge of business and financial accounting matters to understand the information contained in financial statements

• All of the choices are correct

All of the following represent costs of providing financial information except

• preparing

• disseminating

• accessing capital

• auditing

Which of the following are benefits of providing financial information?

• Potential litigation

• Auditing

• Disclosure to competition

• Improved allocation of resources

Under International Financial Reporting Standards (IFRS) notes to the financial statements

• Must be quantifiable

• Must qualify as an element

• Amplify or explain items presented in the main body of the financial statements

• All of the choices are correct regarding notes to the financial statements

The basic principles of accounting used by the International Accounting Standards Board include all of the following except:

• Measurement

• Full disclosure

• Revenue recognition

• Going concern

When should an expenditure be recorded as an asset rather than an expense?

• Never

• Always

• If the amount is material

• When future benefit exits

Which accounting assumption or principle is being violated if a company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's stock price?

• Full disclosure

• Going concern

• Historical cost

• Matching