Actg381 E2-3 & E2-4

Front 1

What is the quality of information that enables users to confirm or correct prior expectations?

Back 1

Confirmatory Value

Front 2

Identify the pervasive constraint developed in the conceptual framework.

Back 2

Cost/Benefit

Front 3

The chairman of the SEC at one time noted, "If it becomes accepted or expected that accounting principles are determined or modified in order to secure purposes other than economic measurement, we assume a grave risk that confidence in the credibility of our financial information system will be undermined." Which qualitative characteristic of accounting information should ensure that such a situation will not occur?

Back 3

Neutrality

Front 4

Muruyama Corp. switches from FIFO to average cost to FIFO over 2 year period. Which qualitative characteristic of accounting information is not followed?

Back 4

Comparability (Consistency)

Front 5

Assume that the profession permits the savings and load industry to defer losses on investments it sells because immediate recognition of the loss may have adverse economic consequences on the industry. Which qualitative characteristic of accounting information is not followed?

Back 5

Neutrality

Front 6

What are the 2 fundamental qualities that make accounting information useful for decision making?

Back 6

Relevance/Faithful Representation

Front 7

Watteau Inc. does not issue its first quarter report until after the second quarter's results are reported.

Back 7

Timeliness

Front 8

Predictive value is an ingredient of which of the 2 fundamental qualities that make accounting information useful for decision making purposes?

Back 8

Relevance

Front 9

Duggan, Inc. is the only company in its industry to depreciate its plant assets on a straight line basis. Which qualitative characteristic of accounting information may not followed?

Back 9

Comparability

Front 10

Roddic Company has attempted to determine the replacement cost of its inventory. 2 different appraiser arrive at substantially different amounts for this value. The president, nevertheless, decides to report the middle value for external reporting purposes. Which qualitative characteristic of information is lacking in these data?

Back 10

Verifiability

Front 11

Qualitative characteristic being employed when companies in the same industry are using the same accounting principles.

Back 11

Comparability

Front 12

Quality of information that confirms users' earlier expectations.

Back 12

Confirmatory Value

Front 13

Imperative for providing comparisons of a company from period to period.

Back 13

Comparability (Consistency)

Front 14

Ignores the economic consequences of a standard or rule.

Back 14

Neutrality

Front 15

Requires a high degree of consensus among individuals on a given measurement.

Back 15

Verifiability

Front 16

Predictive value is an ingredient of this fundamental quality of information.

Back 16

Relevance

Front 17

4 qualitative characteristics that are related to both relevance and faithful representation.

Back 17

Comparability, verifiability, timeliness, and understandability

Front 18

An item is not recorded because its effect on income would not change a decision.

Back 18

Materiality

Front 19

Neutrality is an ingredient of this fundamental quality of accounting information.

Back 19

Relevance

Front 20

2 fundamental qualities that make accounting information useful for decision making purposes.

Back 20

Relevance/Faithful Representation

Front 21

Issuance of interim report is an example of what enhancing quality of relvence?

Back 21

Timeliness