Intermediate Accounting Chapter 2 Assesment
Intermediate Accounting
E2-1
a. True b. False – General-purpose financial reports also assists other people who don’t have the authority to demand financial information they need and so must rely on the information in financial reports. c. False – standards that are based on individual conceptual framework will result in different conclusions being drawn on similar issues, and thus would not be consistent and comparable. d. False – General purpose financial reports are also beneficial to other users who are not capital providers such as government agencies, employees, customers and the public. e. False – an implicit assumption is that users need reasonable knowledge of business and financial accounting matters to understand financial statements and this impacts the way and extent to which information is reported. f. True
E2-3 a. The quality of information that enables users to confirm or correct prior expectations is Relevance. Relevant information has confirmatory value which helps users in confirming or correcting prior expectations. b. Cost constraint c. Neutrality d. Comparability e. Neutrality f. Relevance and Faithful representation g. Timeliness h. Relevance and Faithful representation i. Comparability j. Verifiability
E2-5
a. Gains/losses b. Liabilities c. Investment by owners / Comprehensive Income d. Distribution to owners e. Comprehensive income f. Assets g. Comprehensive income h. Revenues/Expenses i. Equity j. Revenues k. Distribution to owners l. Comprehensive income
E2-7 a. Historical cost principle b. Full disclosure principle c. Matching principle d. Expense recognition principle e. Industry practices f. Economic entity assumption g. Full disclosure principle h. Revenue recognition principle i. Full disclosure principle j. Matching principle k. Economic entity assumption l.
E2-1
a. True b. False – General-purpose financial reports also assists other people who don’t have the authority to demand financial information they need and so must rely on the information in financial reports. c. False – standards that are based on individual conceptual framework will result in different conclusions being drawn on similar issues, and thus would not be consistent and comparable. d. False – General purpose financial reports are also beneficial to other users who are not capital providers such as government agencies, employees, customers and the public. e. False – an implicit assumption is that users need reasonable knowledge of business and financial accounting matters to understand financial statements and this impacts the way and extent to which information is reported. f. True
E2-3 a. The quality of information that enables users to confirm or correct prior expectations is Relevance. Relevant information has confirmatory value which helps users in confirming or correcting prior expectations. b. Cost constraint c. Neutrality d. Comparability e. Neutrality f. Relevance and Faithful representation g. Timeliness h. Relevance and Faithful representation i. Comparability j. Verifiability
E2-5
a. Gains/losses b. Liabilities c. Investment by owners / Comprehensive Income d. Distribution to owners e. Comprehensive income f. Assets g. Comprehensive income h. Revenues/Expenses i. Equity j. Revenues k. Distribution to owners l. Comprehensive income
E2-7 a. Historical cost principle b. Full disclosure principle c. Matching principle d. Expense recognition principle e. Industry practices f. Economic entity assumption g. Full disclosure principle h. Revenue recognition principle i. Full disclosure principle j. Matching principle k. Economic entity assumption l.