5 Written Questions

1. International Financial Reporting Standards.
2. States that every transaction is measured by the stated unit of measurement, such as the dollar.
3. Costs of doing business are recorded in the same period as the revenue they help generate, regardless of when money is actually paid.
4. Financial statements are prepared under the assumption that the company will remain in business indefinitely unless significant evidence otherwise.
5. Assumes a stable currency is going to be the unit of record.

5 Multiple Choice Questions

1. Given two equally likely alternatives to estimate, accountants will choose the less optimistic alternatives.
   1. Conservatism
   2. Objectivity
   3. IFRS
   4. IASB
2. States that an item should be recognized (recorded) in the financial statements when it can defined, measured, relevant, and reliable.
   1. Conservatism
   2. Revenue Recognition Principle
   3. Recognition Concept
   4. Measurement Concept
3. International Accounting Standards Board.
   1. IFRS
   2. APB
   3. IASB
   4. Conservatism
4. All of the business transactions should be separate from those of the owners.
   1. Monetary Unit Assumption
   2. Going Concern Assumption
   3. Economic Business Entity Assumption
   4. Cost Principle Assumption
5. Accounting Principles Board.
   1. IFRS
   2. IASB
   3. APB
   4. Conservatism

5 True/False Questions

1. Time Period Assumption → Financial statements are prepared under the assumption that the company will remain in business indefinitely unless significant evidence otherwise.

   True        False

2. Objectivity → Given two equally likely alternatives to estimate, accountants will choose the less optimistic alternatives.

   True        False

3. Cost Principle Assumption → Assets are recorded at historical cost, not fair market value.

   True        False

4. Full Disclosure Principle → All info pertaining to operations and financial position of the entity must be reported within the period of time in question.

   True        False

5. Revenue Recognition Principle → States that an item should be recognized (recorded) in the financial statements when it can defined, measured, relevant, and reliable.

   True        False