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Exam 2: Financial Reporting Theory

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Question 71

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IFRS identifies ________ point-in-time elements.

A) one
B) three
C) five
D) seven

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Question 72

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Southcoast Warehousing Inc. reported earnings per share of $3.41. This surpassed the average analyst forecast of $2.90. This information has ________ to users of financial information.

A) confirmatory value
B) comparable value
C) consistent value
D) Both A & C

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Question 73

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Which of the following terms describe probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events?

The IFRS element income relates to which U.S. GAAP element(s) ?

IFRS includes all of the following bases of measurement except ________.

Preparation of consolidated financial statements when a parent-subsidiary relationship exists is an example of the ________.

Complete the following table - identify which enhancing characteristic is indicated in each independent scenario and whether it was satisfied or violated. $\begin{array}{|l|l|l|}\hline\text{ Scenario } & \text{ Enhancing Characteristics} & \text{ Satisfied or Violated }\\\hline \text{ Search Engine Corporation} & & \\\text{ reports the historical cost of its} & & \\\text{ archery park on the balance} & & \\\text{ sheet.} & & \\\hline \text{ Creighton's Fine Products} & & \\ \text{ produces very basic financial} & & \\\text{ statements, without }& & \\\text{ classification or notes. They do} & & \\\text{ have complicated lease and }& \\\text{ borrowing agreements, and }& \\\text{ have changed depreciation} & \\\text{ estimates. }& \\\hline\text{ Realistic Ventures Company} & & \\\text{ switched to fair value} & \\\text{ accounting for standing timber,} & & \\\text{ which is the method used by }& & \\\text{ most companies in the industry. }& & \\\hline \text{ Roy \& Quinn's Lakeside }& & \\\text{ Properties provides financial} & & \\\text{ statement information every} & & \\\text{ other year.} & &\\\hline\end{array}$

Financial statements should provide all financial information that is relevant and faithfully representative within the limitations of the ________ constraint.

Identify the assumption represented in each scenario, and then decide if it is satisfied or violated. $\begin{array} { | l | l | l | } \hline \text { Scenario } & \text { Assumption } & \text { Satisfied or violated? } \\\hline \text { Harold Inc. adjusted the } & & \\\text { valuation of balance sheet } & & \\\text { tems to keep up with } & & \\\text { changes in inflation. } & & \\\hline \text { Campers Inc. is facing } & & \\\text { bankruptcy - they choose } & & \\\text { not to list assets and } & & \\\text { liabilities at liquidation } & & \\\text { values on the balance sheet. } & & \\\hline \text { Template Co. issues } & & \\\text { quarterly and annual } & & \\\text { financial statements to } & & \\\text { external users. } & & \\\hline \text { Texas Studio's president } & & \\\text { prly uses the company limo } & & \\\text { for business purposes. } & & \\\hline\end{array}$

________ are restatements or revaluations of reported amounts of assets and liabilities that companies usually report in other comprehensive income.

Which of the following is not a purpose of FASB's conceptual framework?

Which underlying assumption presumes that the owner's personal residence should not be included as an asset on the company balance sheet?

All of the following are enhancing characteristics except ________.

The primary distinction between expenses and losses is ________.

What is the primary purpose of the conceptual framework?

Hanker LLC uses the accrual basis to keep his accounting records. During 2018, he collected $374,000 from clients. At December 31, 2017 he had accounts receivable of $139,000. At December 31, 2018 he had accounts receivable of $164,000 and unearned revenue of $41,000. What did Hanker LLC earn in service revenue for 2018 using the accrual basis of accounting?

U.S. GAAP and IFRS set forth the same objective of financial reporting and the same qualitative characteristics in their respective conceptual frameworks.

Which of the following types of information is not a focus of the primary objective of financial reporting?

________ include(s) all changes in equity during a period except those resulting from transactions with owners.

Which of the following statements is not true about distributions to owners?