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Problem 2-3 Multiple Choice (IAA)

The document discusses the Conceptual Framework for Financial Reporting. It states that: 1) The Conceptual Framework has the highest level of authority in the absence of an applicable standard or interpretation. 2) Management must consider the applicability of the Conceptual Framework in developing and applying accounting policies that result in relevant and faithfully represented information, when no standard or interpretation specifically applies. 3) One of the purposes of the Conceptual Framework is to assist the IASB in the standard-setting process. It is not intended to provide specific guidelines for resolving situations not covered by existing standards.

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68 views

Problem 2-3 Multiple Choice (IAA)

The document discusses the Conceptual Framework for Financial Reporting. It states that: 1) The Conceptual Framework has the highest level of authority in the absence of an applicable standard or interpretation. 2) Management must consider the applicability of the Conceptual Framework in developing and applying accounting policies that result in relevant and faithfully represented information, when no standard or interpretation specifically applies. 3) One of the purposes of the Conceptual Framework is to assist the IASB in the standard-setting process. It is not intended to provide specific guidelines for resolving situations not covered by existing standards.

Uploaded by

Jao Flores
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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a. The Conceptual Framework has the highest level of authority.

b. In the absence of a standard or an interpretation that specifically applies to a


transaction, the Conceptual Framework shall be followed.
c. In the absence of a standard or an interpretation that specifically applies to a
transaction, management shall consider the applicability of the Conceptual Framework
in developing and applying an accounting policy that result in information that is relevant
and faithfully represented.
d. The Conceptual Framework applies only when the IASB develops new standards.

2. The Conceptual Framework is intended to establish

a. GAAP in financial reporting


b. The meaning of “present fairly in accordance with GAAP”
c. The objectives and concepts for use in developing standards of financial accounting
and reporting
d. Defines the basic objectives, terms and concepts of accounting

4. Which of the following is not purpose of the Conceptual Framework?

a. To provide definition of key terms and fundamental concepts.


b. To provide specific guidelines for resolving situations not covered by existing
accounting standards.
c. To assist accountants in selecting among alternative accounting and reporting
methods.
d. To assist the IASB in the standard-setting process.

Problem 2-3 Multiple choice (IAA)

1. In the Conceptual Framework for Financial Reporting, what provides the “why” of
accounting?

a. Measurement and recognition concept


b. Qualitative characteristic of accounting information
c. Element of financial statement
d. Objective of financial reporting

2. The underlying theme of the Conceptual Framework is

a. Decision usefulness
b. Understandability
c. Timeliness
d. Comparability

3. What is the benefit of having a Conceptual Framework?


a. To enable profession to more quickly solve emerging practical problems
b. To provide a foundation from which to build more useful standards
c.To enable the standard setting body to issue more useful and consistent

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