Practice Intermediate Acct. Exam
Intermediate Accounting 1 Exam 1 Spring 2010 1. What are the statements of financial accounting concepts (sfac) intended to establish? a. Generally accepted accounting principles in financial reporting by businesses. b. Generally accepted accounting principles for businesses, not for profit c. The objectives and concepts for use in developing standards of financial accounting and reporting. d. The hierarchy of sources of generally accepted accounting principles.
2. During the lifetime of a business, accountants produce financial statements at arbitrary moments in time in accordance with which basic accounting concept? a. Verifiability b. Peridodicity c. Conservatism d. Matching
3. Continuation of an accounting entity in the absence of evidence to the contrary is an example of the basic concept of a. Accounting entity b. Consistency c. Going concern d. Substance over form
4. Reporting inventory at the lower of cost or market is a departure from the accounting principle of a. Historical cost b. Consistency c. Conservatism d. Full disclosure
5. SFAC 2, Qualitative Characteristics of accounting information, identifies the two primary qualities that make accounting information useful for decision making as a. Neutral and verifiable b. Fair and precise c. Relevant and reliable d. Consistent and comparable
6. According to statements of financial accounting concepts, neutrality is an ingredient of
Reliability Relevance a. Yes yes b. Yes no c. No yes d. No no
7. Which of the following is considered a pervasive constraint by SFAC 2? a. Benefits> costs b. Conservatism c. Timeliness d. Verifiability
8. Materiality is the threshold for recognition of accounting information. Which of the following statements is true with regard to materiality?
2. During the lifetime of a business, accountants produce financial statements at arbitrary moments in time in accordance with which basic accounting concept? a. Verifiability b. Peridodicity c. Conservatism d. Matching
3. Continuation of an accounting entity in the absence of evidence to the contrary is an example of the basic concept of a. Accounting entity b. Consistency c. Going concern d. Substance over form
4. Reporting inventory at the lower of cost or market is a departure from the accounting principle of a. Historical cost b. Consistency c. Conservatism d. Full disclosure
5. SFAC 2, Qualitative Characteristics of accounting information, identifies the two primary qualities that make accounting information useful for decision making as a. Neutral and verifiable b. Fair and precise c. Relevant and reliable d. Consistent and comparable
6. According to statements of financial accounting concepts, neutrality is an ingredient of
Reliability Relevance a. Yes yes b. Yes no c. No yes d. No no
7. Which of the following is considered a pervasive constraint by SFAC 2? a. Benefits> costs b. Conservatism c. Timeliness d. Verifiability
8. Materiality is the threshold for recognition of accounting information. Which of the following statements is true with regard to materiality?