Accounting Principles
 
  1. Question: Generally accepted accounting principles are:

    A
    a set of standards and rules that are recognized as a general guide for financial reporting.

    B
    usually established by the Internal Revenue Service.

    C
    the guidelines used to resolves ethical dilemmas.

    D
    fundamental truths that can be derived from the laws of natural.

    Note: Not available
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  2. Question: Which of the following is not an objective of financial reporting?

    A
    Provide information that is useful in investment and credit decisions.

    B
    Provide information about economic resources, claims to those resources and changes in them.

    C
    Provide information that is useful in assessing future cash flows.

    D
    Provide information on the liquidation value of a business.

    Note: Not available
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  3. Question: The primary criterion by which accounting information can be judged is:

    A
    consistency.

    B
    predictive value.

    C
    decision-usefulness.

    D
    comparability.

    Note: Not available
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  4. Question: Verifiability is an ingredient of: Reliability Relevance

    A
    Yes No

    B
    No Yes

    C
    Yes No

    D
    No Yes

    Note: Not available
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  5. Question: Valuing assets at their liquidation value rather than their cost is inconsistent with the:

    A
    time period assumption.

    B
    matching concern assumption.

    C
    going concern assumption.

    D
    materiality constraint.

    Note: Not available
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  6. Question: Gonzalez's Construction Company began a long-term construction contract on January 1,2002. The contract is expected to be completed in 2003 at a total cost of $20,000,000. Gonzalez's revenue for the project is $24,000,000. Gonzalez incurred contract costs of $4,000,000 in 2002. What gross profit should be recognized in 2002?

    A
    $800,000

    B
    $1,000,000

    C
    $2,000,000

    D
    $4,000,000

    Note: Not available
    1. Report
  7. Question: Dunlop Company had installment sales of $1,000,000 in its first year of operations. The cost of goods sold on installment was $650,000. Dunlop collected a total of $500,000 on the installment sales. Using the installment method, how much gross profit should be recognized in the first year?

    A
    $140,000.

    B
    $175,000.

    C
    $350,000.

    D
    $500,000.

    Note: Not available
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  8. Question: The full disclosure principle dictates that:

    A
    financial statements should disclose all assets at their cost.

    B
    financial statements should disclose only those events that can be measured in dollars.

    C
    financial statements should disclose all events and circumstances that would matter to users of financial statements.

    D
    financial statements should not be relied on unless an auditor has expressed an unqualified opinion on them.

    Note: Not available
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  9. Question: The accounting constraint that means that when in doubt that accountant should choose the method that will be least likely to overstate assets and income is called:

    A
    the matching principle.

    B
    materiality

    C
    conservatism

    D
    the monetary unit assumption.

    Note: Not available
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  10. Question: The organization that issues international accounting standards is the:

    A
    Financial Accounting Standard Board.

    B
    International Accounting Standards Committee.

    C
    International Auditing Standards.

    D
    None of the above

    Note: Not available
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