Question

In: Accounting

1. When a company uses cash-basis accounting, it frequently does not keep up with a. accounts...

1. When a company uses cash-basis accounting, it frequently does not keep up with

a. accounts payable.

b. prepaid expenses.

c. the company keeps up with all of these choices.

d. accounts receivable.

2. The joint IASB and FASB boards identified several "enhancing" decision useful characteristics of financial information including

a. comparability, verifiability, timeliness, and understandability

b. materiality, verifiability, timeliness, and understandability

c. comparability, relevance, timeliness, and understandability

d. comparability, verifiability, timeliness, and materiality

3. Which one of the following assumptions or principles most logically supports the preparation of a single set of consolidated financial statements that combines the financial information of several wholly owned but separately identifiable businesses?

a. historical cost

b. reporting entity

c. industry practices

d. materiality

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4. Which of the following statements is not true with regard to the benefits derived from the FASB's conceptual framework of accounting?

a. The Statements of Financial Accounting Concepts is the primary source of GAAP for accountants.

b. It enhances comparability between different company's financial statements.

c. It serves as a guide in establishing standards for the FASB.

d. It establishes the objectives of financial reporting.

Solutions

Expert Solution

Answer : 1) Correct Option is c. the company keeps up with all of these choices.

Reason :When a company uses cash-basis accounting, it frequently does keeps up with Accounts payable prepaid expense and accounts receivable all.

Answer : 2 Correct option is a. comparability, verifiability, timeliness, and understandability.

Reason :

The joint IASB and FASB boards identified several "enhancing" decision useful characteristics of financial information including comparability, verifiability, timeliness, and understandability which makes financial statement true and fair.

Answer : 3) Correct option is (b.) Reporting Entity.

Reason :

Reporting Entirty assumption or principles most logically supports the preparation of a single set of consolidated financial statements that combines the financial information of several wholly owned but separately identifiable businesses

Answer : 4) The Statements of Financial Accounting Concepts is the primary source of GAAP for accountants.

Reason :

It will be incorrect to say that The Statements of Financial Accounting Concepts is the only primary source of GAAP for accountants.

ekkarill92 answered 2 years ago

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