ACC407 Chapter 2

Which of the following is the fundamental qualitative characteristics of the conceptual framework for financial reporting ?

• Relevance

• Verifiability

• Timeliness

• Understandability

________________ concepts assume that a business will continue in operation indefinitely.

• Materiality

• Prudence

• Going concern

• Neutrality

The financial statements should not be prepared with the intention to influence certain decisions. This is in accordance with the __________concept.

• comparibility

• neutrality

• consistency

• materiality

Which of the following qualitative characteristics relates to the fact that an information is complete, neutral and free from error?

• Verifiability

• Faithful representation

• Consistency

• Relevant

________ characteristic requires financial information to be comprehensible.

• Verifiabilty

• Comparabilty

• Understandabilty

• Timeliness

The going concern assumption assumes that ______________.

• the business will be liquidated in the near future.

• the business’s sole concern is to ensure the accuracy of the financial records.

• the business will presents useful information in yearly basis.

• the business will continue on long period of time to carry out its existing objective and commitments

The accounting concept that states the recorded business activities should be kept separated from the recorded activities of its owner is the ___________ concept.

• comparability

• economic entity

• monetary measurement

• neutrality

“The transaction in bookkeeping is concerned only with those facts which can be measured in monetary terms”. This is in line with the _______ concept.

• going concern

• comparability

• consistency

• money measurement

The financial statements should not be prepared with the intention to influence certain decisions. This is in accordance with the ________ concept.

• consistency

• comparability

• going concern

• neutrality

The consistency concept states that ___________ .

• a business should only record business transactions that can be stated in terms of a currency.

• a business should change its auditor from year to year.

• the same accounting methods should be used from year to year.

• a business should not change the owners of a business.