WorksheetsIntermediate Accounting 1 (AC120107)
Total questions: 15
Worksheet time: 6mins
Which statement is incorrect regarding the Conceptual Framework for Financial Reporting?
Serves as a guide in developing future PFRSs.
Serves as a guide in resolving accounting issues that are not addressed directly in existing PFRSs.
Is not a PFRS and hence does not define standards for any particular measurement or disclosure issue.
Prevails in cases where there is conflict with a PFRS.
Which of the following remains unchanged in the 2018 Conceptual Framework?
The reporting entity
Derecognition
Presentation and disclosure
Concepts of capital and capital maintenance
Which of the following is the foundation of Conceptual Framework?
The objective of general-purpose financial reporting.
A reporting entity concept.
The qualitative characteristics of, and the constraint on, useful financial information.
The elements of financial statements.
What is the objective of financial reporting as indicated in the Conceptual Framework?
Provide information that is useful to those making investing and credit decisions.
Provide information that is useful to management.
Provide information about those investing in the entity.
Provide information that is relevant to the national government.
The 'primary users' of financial information include:
I. Existing and potential investors
II. Existing and potential lenders and other creditors
III. User group such as employees, customers, government and their agencies, and the public
I only
I and II only
I and III only
I, II and III
The decisions of the 'primary users' involve:
I. Buying equity and debt instruments.
II. Selling or holding equity and debt instrument.
III. Providing or settling loans and other forms of credit.
I only
I and II
III only
I, II and III
Accounting information is considered to be relevant when it
Is capable of making a difference in a decision.
Is verifiable and neutral.
Can be depended on to represent the economic conditions and events that it is intended to represent.
Is understandable by reasonably informed users of accounting information.
To be a faithful representation as described in the Conceptual Framework, information must be all of the following, except:
Complete
Free from error
Confirmatory
Neutral
In analyzing company's financial statements, which financial statement would a potential investor primarily use to assess the company's liquidity and financial flexibility?
Balance Sheet
Income Statement
Statement of retained earnings
Statement of cash flows
The Conceptual Framework includes all of the following, except:
Objective of financial reporting.
Qualitative characteristics of accounting information.
Elements of financial statements.
Supplementary information.
The underlying theme of the Conceptual Framework is
Decision usefulness
Understandability
Reliability
Comparability
What is the quality of information that enables users to better forecast future operations?
Reliability
Materiality
Comparability
Relevance
According to the Conceptual Framework, the usefulness of providing information in financial statements is subject to the constraint of
Consistency
Materiality
Reliability
Balance between benefit and cost
Which of the following statements provide information as of a specific point in time?
Statement of financial position
Income Statement
Statement of cash flows
Statement of changes in equity
It is defined as the process of capturing for inclusion in the financial statements an item that meets the definition of the elements of financial statements.
Classifying
Recognition
Derecognition
Measurement
