2 - Conceptual Framework Financial Reporting and Assumptions Flashcards Quizlet PDF

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9/23/21, 9:23 AM

2 - Conceptual Framework: Financial Reporting and Assumptions Flashcards | Quizlet

2 - Conceptual Framework: Financial Reporting and Assumptions Terms in this set (73) The Conceptual Framework deals

d.

with all of the following, except a. The objective of financial reporting b. The qualitative characteristics of useful financial information c. The definition, recognition and measurement of the elements of financial statements d. Supplementary information

Which of the following statements

d.

is true concerning the Conceptual Framework for Financial Reporting? a. It is not a reporting standard and does not define standard for any particular measurement or disclosure issue. b. It is concerned with general purpose fin statements including consolidated fin statements. c. Nothing in the framework overrides any specific PFRS. d. All are true.

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Which is not a purpose of the

d.

Conceptual Framework? a. to assist FRSC in developing accounting standards that will represent Philippine GAAP b. to assist FRSC in the review and adoption of existing international accounting standards c. to assist auditors in forming an opinion as to whether fin statements conform with Phil. GAAP d. to assist BOA in promulgating rules and regulations affecting the practice of public accountancy

Which is a basic purpose of the

d.

Conceptual Framework? a. to assist users of fin statements in interpreting the information contained in the financial statements b. to provide information to those interested in the work of FRSC in the formulation of PFRS c. to assist preparers of fin statements in applyng accounting standards d. All of these

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This is a complete, comprehensive

a.

and single document promulgated by IASB establishing the concepts that underlie financial reporting. a. Conceptual Framework for Financial Reporting b. Conceptual Framework for Financial Statements c. Conceptual Framework for Business Entities d. Conceptual Framework

What is the authoritative status of

c.

the Conceptual Framework? a. The Conceptual Framework has the highest level of authority. b. In the absence of a standard or an interpretation that specifically applies to a transaction, the Conceptual Framework shall prevail. c. In the absence of a standard or an interpretation that specifically applies to a transaction, management shall consider the applicability of the Conceptual Framework in developing and applying an accounting policy that results in information that is relevant and reliable. d. The Conceptual Framework applies only when the IASB develops new or revised standards.

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As regards the relationship

d.

between IFRS and the Conceptual Framework, which of the following is true? I. The Conceptual Framework is a reporting standard. II. In case of conflict, the requirements of the Conceptual Framework prevail over those of the relevant IFRS. a. I only b. II only c. Both d. Neither

The Conceptual Framework is

c.

intended to establish a. GAAP b. The meaning of "present fairly in accordance with GAAP" c. The objectives and concepts for use in developing standards of financial accounting and reporting d. The hierarchy of sources of GAAP

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The Conceptual Framework should

d.

a. Lead to uniformity of financial statements among entities within the same industry b. Eliminate alternative accounting principles c. Guide MNCs in developing generally accepted auditing standards d. Define the basic objective, terms and concepts of accounting

Which is not a purpose of the

b. (this is a purpose of the Philippine Interpretations)

Conceptual Framework? a. Provide definitions of key terms and concepts b. Provide specific guidelines for resolving situations not covered by existing accounting standards c. Assist accountants in selecting among alternative accounting and reporting methods d. Assist IASB in the standardsetting process

In the Conceptual Framework for

d.

Financial reporting, what provides the "why" of accounting? a. Measurement and recognition concept b. Qualitative characteristic of accounting information c. Element of financial statement d. Objective of financial reporting

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The underlying theme of the

a.

Conceptual Framework is a. Decision usefulness b. Understandability c. Timeliness d. Comparability

What is a benefit of having a

d.

Conceptual Framework? a. To enable the accountancy profession to more quickly solve emerging practical problems. b. To provide information from which to build more useful standards. c. To enable standard setting body to issue more useful and consistent pronouncements over time. d. All of these.

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Which of the following is not a

d.

benefit associated with the Conceptual Framework? a. A Conceptual Framework should increase financial statement users' understanding and confidence in financial reporting. b. Practical problems should be more quickly solvable by reference to an existing Conceptual Framework. c. A coherent set of accounting standards and rules should result. d. Business entities will need far less assistance from accountants because the financial reporting process will be quite easy to apply.

Which is an important characteristic

c.

of the Conceptual Framework? I. To enable the accountancy profession to more quickly solve emerging practical problems. II. To provide a foundation from which to build more useful financial accounting standards. a. I only b. II only c. Both d. Neither

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Which of the following is not true

b.

concerning the Conceptual Framework? I. It should be a basis for standard setting. II. The Conceptual Framework should allow practical problems to be solved more quickly. III. It should be based on fundamental truth derived from the law of nature. a. II only b. III only c. II and III only d. I and II only

A soundly Conceptual Framework

d.

should I. Increase financial statements users' understanding and confidence in financial reporting II. Enhance comparability of financial statements across entities. III. Allow new and emerging practical problems to be solved more quickly. a. I only b. I and II only c. I and III only d. I, II, III

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The primary users of financial

d.

statements include a. Existing and potential investors b. Existing and potential lenders and other creditors c. User group such as employees, customers, governments and their agencies, and the public d. Existing and potential investors, lenders, and other creditors

The users of financial reports

d.

include a. Creditors b. Creditors and government agencies c. Creditors and unions d. Creditors, government agencies and unions

Which of the following is an

a

internal user of financial information? a. BOD b. Shareholder c. Bondholder d. Creditor with a long-term contract

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These users require information on

a

risk and return on investment a. Investors b. Employees c. Lenders d. Customers

These users are interested in

d

information about the profitability and stability of an entity in order to assess the ability of the entity to provide remuneration, retirement benefits and employment opportunities. a. Customers b. The public c. Government and their agencies d. Employees

These users are interested in

a

information about the continuance of an entity when they have a longterm involvement with or are dependent on the entity. a. Customers b. Employees c. Trade unions d. Suppliers

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These users are interested in

a

information in order to regulate the activities of an entity, determine taxation policies and provide a basis for national statistics. a. Government and their agencies b. Major organization of users c. BIR d. Department of Finance

These users need information on

a

trends and recent developments where an entity makes a substantial contribution to the local economy providing employment and using local suppliers. a. The public b. Government and their agencies c. Finance entities d. Private entities

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Which of the following in relation

c

to information needs is true? I. Information that meets the need of specified primary users is likely to meet the needs of other users, such as employees, customers, government and their agencies, and the public. II. The management is also interested in financial information but it need not rely on general purpose financial reports because it can access additional information internally. a. I only b. II only c. Both d. Neither

These users are interested in

a

information that enables them to assess whether their loans, the related interest thereon, and other amounts owing to them will be paid when due. a. Lenders and other creditors b. Borrowers c. Trade creditors d. Owners

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What is the objective of financial

b

reporting? a. To provide information about the financial position and financial performance of an entity b. To To provide information about an entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity c. To prepare a statement of financial position, a statement of comprehensive income and a statement of cash flows d. To prepare financial statements in accordance with all applicable standards and interpretations

The overall objective of financial

a

reporting is to provide information a. That is useful for decision making b. About assets, liabilities and equity of an entity c. About financial performance during a period d. That allows owners to assess management performance

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Which is an objective of financial

c

reporting? a. to provide information that is useful to management in making decisions b. to provide information that clearly portrays non-financial transactions c. to provide information that is useful to assess the amounts, timing and uncertainty of of prospective cash receipts d. to provide information that excludes claims against the resources

One objective of financial

c

reporting is to provide a. Information about the investors in the entity b. Information about the liquidation value of the resources held by the entity c. Information that is useful in assessing cash flow prospects d. Information that will attract new investors

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An objective of financial reporting

c

is "assessing cash flow prospects" which is interpreted to mean a. Cash basis accounting is preferred over accrual basis of accounting. b. Information about the financial effects of cash receipts and cash payments is generally considered the best indicator of ability to generate favorable cash flows. c. Over the long run, trends in revenue and expenses are generally more meaningful than trends in cash receipts and disbursements. d. All of these.

Which of the following best

a

describes "financial performance"? a. The revenue, expenses and net income or loss for a period b. The assets, liabilities and equity c. The total assets minus total liabilities d. The total cash inflows minus total cash outflows

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In measuring financial

b

performance, accrual accounting is used because a. Cash flows are considered less important. b. It provides a better indication of ability to generate cash flows than cash basis. c. It recognizes revenue when cash is received and expenses when cash is paid. d. It is one of the implicit assumptions.

The most useful information to

b

existing and potential investors, lenders and other creditors in predicting future cash flow is a. Information about cash flows b. Current earnings based on accrual accounting c. Information regarding the accounting policies used by management d. Information regarding the results obtained by using a wide variety of accounting policies

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The accrual basis of accounting is

b

most useful for a. Determining the amount of income tax liability b. Predicting the short-term financial performance. c. Predicting the long-term financial performance. d. Determining the amount of dividends to be declared.

The primary focus of financial

b

reporting has been on meeting the needs of which of the following groups? a. Management b. Existing and potential investors, lenders and other creditors c. National and local taxing authorities d. Independent CPAs

Which of the following best

d

describes the term "financial position"? a. The net income and expenses b. The net of financial assets less liabilities c. The potential to contribute to the flow of cash and cash equivalents d. The assets, liabilities and equity

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The objectives of financial

d

reporting are based on a. The need for conservatism b. Reporting on management stewardship c. Generally accepted accounting principles d. The needs of the users of the information

Which of the following statements

b

is not a major objective of financial reporting? a. It shall provide information about entity resources, claims against those resources and changes in them. b. It shall provide information useful in evaluating management stewardship. c. It shall provide information useful in investment, credit and similar decision. d. It shall provide information useful in assessing cash flow prospects.

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Which of the following is not an

d

objective of financial reporting? a. To provide information about an entity's assets and claims against those assets b. To provide information that is useful in assessing an entity's ...