Question :
41.The monetary unit that a company uses to measure economic : 1253597
41.The monetary unit that a company uses to measure economic transactions is primarily determined by the:
a.stable dollar concept adjusted for inflationary effects.
b.markets in which a company operates.
c.fiscal period a company has chosen.
d.decision by management to elect to use a given currency.
42.Which one of the following is considered an unrealistic assumption in accounting?
a.Economic entity
b.Stable dollar
c.Going concern
d.Fiscal period concept
43.Objective accounting information:
cannot be used in the financial statements.
requires that values of transactions and related assets and liabilities created by them be arbitrarily determined.
ensures that revenue matches expenses for every accounting period.
states that financial accounting information must be reliable and verifiable.
44.The matching principle states that:
a.expenses should be recognized in the period that the related revenue is recognized.
b.after expenses have been identified in a particular accounting period in which they were incurred, revenues can be recognized.
c.each company should use the same accounting principles as other companies use.
d.for every dollar of revenue recognized, the company should recognize a corresponding dollar of expenses.
45.Morgan Shipping held cash of $1 million throughout 2010 when the general price level decreased by over 30 percent. Morgan Shipping:
has more than $1 million of purchasing power at the end of the period.
has less than $1 million purchasing power at the end of the period.
must recognize the gain due to general price level increases in its income statement.
has the same $1 million purchasing power at the end of the period as at the beginning of the period.
47.The most common point of revenue recognition is:
a.when the cash is collected from the customer.
b.when the customer elects to issue the check to pay for goods shipped.
c.when the goods are delivered to the customer.
d.as the goods are being produced.
48.The principle of consistency states that:
a.companies should choose a set of accounting methods and use them from one period to the next.
b.once a company selects an accounting method, it must use that method throughout the company’s entire existence.
c.a company may change any accounting method, provided the SEC approves the change.
d.companies should elect to use methods that consistently inflate profits.
49.Everett, Inc.’s reporting period ends on June 30th every year. This is an example of:
a.matching.
b.fiscal period.
c.materiality.
d.relevance.
50.Which of the following represents two of the four criteria that must be met before revenue can be included in the income statement?
The amount of revenue must be objectively measurable and the cash must be collected.
The company elects to record the revenue and the cash for payment is relatively certain.
The company must intend to transfer the goods or services to the buyer and the collection of cash must be reasonably assured.
The collection of cash must be reasonably assured and the amount of revenue can be objectively measured.
