Question :
34.Accounting information that capable of making a difference in a : 1168971
34.Accounting information that is capable of making a difference in a decision by the user of the report is
A. comparable.
B. reliable.
C. relevant.
D. neutral.
35.Select the statement below that does notcorrectly describe the qualitative characteristic of reliability.
A. Reliability means that the information should be dependable.
B. Reliable information is a faithful representation of the company’s financial affairs.
C. Reliable information should be compared with the same data for other companies.
D. Information that is reasonably free of error and bias is assumed to be reliable.
36.Select the statement below that correctly describes the qualitative characteristic of comparability.
A. Information is reasonably free of error and bias to be comparable.
B. Financial results of one period should closely resemble the financial results of a previous period.
C. The financial reports reflect what really happened during a time period.
D. Financial data is presented in such a manner that it can be meaningfully compared with the same data for other companies.
37.The Cervantes Company uses the same method of depreciation for its equipment in each fiscal period. This practice is an example of
A. conservatism.
B. consistency.
C. materiality.
D. matching.
38.The separateeconomicentityassumption assumes that:
A. financial events are meaningful only when they can be expressed in economic terms.
B. the business will continue to operate indefinitely.
C. the financial statements of a business reflect the affairs of the business—not the affairs of the owners.
D. a business’s life can be separated into time periods with income being reported within one economic time period.
39.The monetaryunitassumption assumes that:
A. the business will continue to operate indefinitely.
B. revenues and expenses of a business can be separated into separate time periods.
C. the idea that expressing financial facts and events is meaningful only when they can be expressed in monetary terms.
D. the value of money is not stable.
40.Which of the following statements is correct?
A. Under the accrual basis of accounting, revenue is recorded in the period in which it is earned.
B. Under the accrual basis of accounting, expenses are recorded in the period in which they are paid.
C. Under the accrual basis of accounting, revenue is recorded in the period in which it is received.
D. Under the accrual basis of accounting, revenue is recorded in the period in which it is paid.
41.Each year there was an increase in the market value of some stock owned by the Mudstream Company, but the accountant did not record the increase in asset value and equity until the stock was sold. In this situation, the accountant
A. followed the matching principle.
B. followed the realization principle.
C. violated the accrual principle.
D. violated the matching principle.
42.Keeping the personal assets of the owner of a business separate from the assets of the firm is an example of
A. following the going concern assumption.
B. applying the realization principle.
C. following the separate entity assumption.
D. applying the conservatism constraint.
43.When Tamar Snyder opened a shoe store, her accountant did not include the cash in her personal savings account as one of the assets of the business. This is an example of
A. the separate entity assumption.
B. the conservatism constraint.
C. the materiality constraint.
D. industry practice constraint.
