Intermediate Accounting chapter 2

Which of the following is a constraint in presenting financial information? (A. Cost B. Full disclosure C. Relevance D. Consistency)

Cost

The first level of the conceptual framework identifies the recognition, measurement, and disclosure concepts used in establishing accounting standards.

False

Expensing the cost of copy paper when the paper is acquired is an example

Materiality

Under current GAAP, inflation is ignored in accounting due to the

Monetary unit assumption

According to the FASB's conceptual framework, what does the concept of faithful representation include? A. Verifiability B. Predictive value C. Materiality D. Neutrality

Neutrality

According to the FASB's conceptual framework, which of the following is an essential characteristic of an asset? A. The claims to an asset's benefits are legally enforceable. B. An asset is tangible. C. An asset is obtained at a cost. D. An asset provides future benefits.

The claims to an assets benefits are legally enforceable

A soundly developed conceptual framework enables the FASB to issue more useful and consistent pronouncements over time.

True

Relevance and faithful representation are the two fundamental qualities that make accounting information useful for decision making.

True

The objective of financial reporting is the foundation of the conceptual framework

True

The second level of the conceptual framework provides the qualitative characteristics that make accounting information useful and the elements of financial statements.

True