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Uncertainty and risks inherent in business situations should be adequately considered in f

Uncertainty and risks inherent in business situations should be adequately considered in financial reporting. This statement is an example of the concept of

a.Conservatism

b.Completeness

c.Neutrality

d.Representational faithfulness

12.Determining periodic earnings and financial position depends on measuring economic resources and obligations and changes in them as these changes occur. This explanation pertains to

a.Disclosure

b.Accrual accounting

c.Materiality

d.The matching concept

13.Under what condition is it proper to recognize revenues prior to the sale of the merchandise?

a.When the ultimate sale of the goods is at an assured sales price

b.When the revenue is to be reported as an installment sale

c.When the concept of internal consistency (of amounts of revenue) must be complied with

d.When management has a long-established policy to do so

12.Which of the following is not a concept of income identified by Bedford?

a.Psychic

b.Real

c.Investment

d.Money

13.The definition of the economic concept of income is usually attributed to which of the following economists?

a.J. R. Hicks

b.Paul Samuelson

c.Ben Bernanke

d.Adam Smith

14.Which of the following is not an approach to determining current value?

a.Replacement cost

b.Thrift value

c.Selling price

d.Discounting present value

15.Each asset—inventory, plant, equipment, and so on—would be valued based on the selling price that would be realized if the firm chose to dispose of it is the definition of  which of the following current  value concepts?

a.Replacement cost

b.Entry price

c.Exit value

d.Discounted  present value

16.The cost to replace assets with similar assets in a similar condition is the definition of which of the following current value concepts?

a.Replacement cost

b.Selling price

c.Exit value

d.Discounted  present value

17.Income is equal to the difference between the present value of the net assets at the end of the period and their present value at the beginning of the period, excluding the effects of investments by owners and distributions to owners is the definition of  which of the following current  value concepts?

a.Replacement cost

b.Selling price

c.Exit value

d.Discounted  present value

18.Which of the following is not a criteria outlined in SEC Staff Accounting Bulletin No. 101 for the recognition of revenue?

a.Persuasive evidence of an arrangement exists.

b.Delivery has not occurred.

c.The vendor’s fee is fixed or determinable.

d.Collectability is probable.

19.Which of the following accounting theorists called of conservatism the most influential principle of valuation in accounting?

a.Henry Sweeney

b.Robert Sprouse

c.Robert Sterling

d.Edgar Edwards

20.The one-time overstatement of restructuring charges to reduce assets, which reduces future expenses, is the definition of which of the following earnings management techniques?

a.Taking a bath

b.Creative acquisition accounting

c.Creasing “cookie jar” reserves

d.Abusing the materiality concept

21.Deliberately recording errors or ignoring mistakes in the financial statements under the assumption that their impact is not significant, is the definition of which of the following earnings management techniques?

a.Taking a bath

b.Creative acquisition accounting

c.Creasing “cookie jar” reserves

d.Abusing the materiality concept

22.Overstating sales returns or warranty costs in good times and using these overstatements in bad times to reduce similar charges, is the definition of which of the following earnings management techniques?

a.Taking a bath

b.Creative acquisition accounting

c.Creasing “cookie jar” reserves

d.Abusing the materiality concept

Dec 10 2019 View more View Less

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