FAR661 TOPIC 1 & 2

Littleton (1956) identified seven preconditions of an orderly accounting system. The important preconditions are _____.

• writing and arithmetic

• money and trade

• capital and credit

• commerce and private property

FASB is responsible for the setting of accounting standards in the U.S. was established in _________ phase.

• Management Contribution

• Institution Contribution

• Politicization

• Professional Contribution

Issued 2 sets of guidelines on Financial Reporting practices of financial institutions. This relates to

• Bursa Malaysia

• Bank Negara Malaysia

• Securities Commission of Malaysia

• Malaysian Accounting Standards Board

The following are the current pronouncement of Malaysia's accounting standards, except?

• Malaysian Financial Reporting Standards (MFRS)

• Malaysian Public Sector Accounting Standards (MPSAS)

• Malaysian Private Entity Reporting Standards (MPERS)

• Malaysian Accounting Standards (MAS)

Why accounting theory is important?

• Provide more favorable accounting profit

• Guide development of new accounting practice

• To ensure accountants behave

• Remove the likelihood of fraudulent financial reporting

Inductive approach starts with observation

• True

• False

____________________ seek to explain and predict which methods accountants will actually use

• Positive theories

• Normative theories

• Symantec theories

• Agency theory

All of the is agency cost, except?

• Monitoring cost

• Residual loss

• Scapt cost

• Bonding cost

The normative theory is to justify the accounting practices that should be adopted such as conceptual framework

• True

• False

Known as the father of accounting who invented the bookkeeping system.

• Billie Eilish

• Luca Pacioli

• Leonardo da Vinci

• Mother Teresa