Question 1

Principles are basic assumptions concerning the business environment.

Accepted Answer

A) True 
 B)False

Question 2

Distinguish between a postulate and a principle as they are used in ARS 1 and ARS 3. Identify the major categories of each that are included in these two studies.

Accepted Answer

Postulates are basic assumptions concern...

Question 3

Proprietary theory assumes that the owners and the firm are virtually identical.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following concepts focuses on preparers of financial information?

Accepted Answer

A)  Comparability
B)  Consistency
C)  Uniformity
D)  Both b and c

Question 5

Which of the following postulates is violated when liquidation values for assets and equities are reported under ordinary circumstances?

Accepted Answer

A)  Entities
B)  Time period
C)  Consistency
D)  Going concern

Question 6

Recognition and Matching are examples of:

Accepted Answer

A)  input-oriented principles.
B)  output-oriented principles.
C)  constraining principles.
D)  both a and c.

Question 7

Which of the following is  not‾\underline{not}not​  a criticism that has been aimed at ARS 1?

Accepted Answer

A)  Some postulates appear to stem from one of the other postulate categories.
B)  Self-evident postulates may not be sufficiently substantive to lead to a unique and meaningful set of accounting principles.
C)  The postulates are necessary but not sufficient to lead to a viable outcome.
D)  Postulates should have played a less passive role.

Question 8

Distinguish between input-oriented principles and output-oriented principles and list at least three principles in each category.

Accepted Answer

Input-oriented principles are concerned ...

Question 9

Preferred stockholders are residual equity holders.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following are defined in the text as general approaches utilized in the recognition and measurement of accounting events?

Accepted Answer

A)  Concepts
B)  Principles
C)  Postulates
D)  Axioms

Question 11

What is the going-concern postulate of ARS 1, and how has it been criticized?

Accepted Answer

The going-concern postulate states that ...

Question 12

Which type of accounting principle is concerned with the comparability of financial statements of different firms?

Accepted Answer

A)  Input-oriented principles
B)  Output-oriented principles
C)  Constraining principles
D)  Both a and c

Question 13

Distinguish between proprietary theory and entity theory. Include descriptions of the balance sheet equation used by each and how income is computed.

Accepted Answer

Proprietary theory assumes that the owne...

Question 14

There are eight broad principles in ARS 3.

Accepted Answer

A) True 
 B)False

Question 15

The time period idea is somewhat artificial because it creates definite segments out of what is a continuing process.

Accepted Answer

A) True 
 B)False

Question 16

Accounting concepts have largely evolved from practical operating necessities, including income tax laws.

Accepted Answer

A) True 
 B)False

Question 17

When we view the business entity in the context of accounting, as well as in its legal form, it is clear that:

Accepted Answer

A)  the entity is separate from its owners.
B)  the entity is identical to its owners.
C)  the pooling method should be used for business combinations.
D)  entities should be considered as one unit as a result of one controlling the other(s) .

Question 18

A principle contains elements observable by empirical techniques.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following theories assumes that the owners and the firm are virtually identical?

Accepted Answer

A)  Residual equity theory
B)  Proprietary theory
C)  Entity theory
D)  Commander theory

Question 20

Which of the following is an accurate overall label for the terms postulates and principles?

Accepted Answer

A)  Constraints
B)  Concepts
C)  Axioms
D)  Conventions

Exam 5: Postulates, Principles, and Concepts

Which of the following postulates is violated when liquidation values for assets and equities are reported under ordinary circumstances?

Correct AnswerverifiedShow Answer

Which of the following concepts focuses on preparers of financial information?

Correct AnswerverifiedShow Answer

Proprietary theory assumes that the owners and the firm are virtually identical.

Correct AnswerverifiedShow Answer

Which of the following theories assumes that the owners and the firm are virtually identical?

Correct AnswerverifiedShow Answer

A principle contains elements observable by empirical techniques.

Correct AnswerverifiedShow Answer

Which of the following is not‾\underline{not}not​ a criticism that has been aimed at ARS 1?

Correct AnswerverifiedShow Answer

What is the going-concern postulate of ARS 1, and how has it been criticized?

Correct AnswerverifiedThe going-concern postulate states that ...View AnswerShow Answer

When we view the business entity in the context of accounting, as well as in its legal form, it is clear that:

Correct AnswerverifiedShow Answer

Accounting concepts have largely evolved from practical operating necessities, including income tax laws.

Correct AnswerverifiedShow Answer

Distinguish between a postulate and a principle as they are used in ARS 1 and ARS 3. Identify the major categories of each that are included in these two studies.

Correct AnswerverifiedPostulates are basic assumptions concern...View AnswerShow Answer

Distinguish between proprietary theory and entity theory. Include descriptions of the balance sheet equation used by each and how income is computed.

Correct AnswerverifiedProprietary theory assumes that the owne...View AnswerShow Answer

Which of the following is an accurate overall label for the terms postulates and principles?

Correct AnswerverifiedShow Answer

Which type of accounting principle is concerned with the comparability of financial statements of different firms?

Correct AnswerverifiedShow Answer

Preferred stockholders are residual equity holders.

Correct AnswerverifiedShow Answer

The time period idea is somewhat artificial because it creates definite segments out of what is a continuing process.

Correct AnswerverifiedShow Answer

Principles are basic assumptions concerning the business environment.

Correct AnswerverifiedShow Answer

Recognition and Matching are examples of:

Correct AnswerverifiedShow Answer

There are eight broad principles in ARS 3.

Correct AnswerverifiedShow Answer

Which of the following are defined in the text as general approaches utilized in the recognition and measurement of accounting events?

Correct AnswerverifiedShow Answer

Distinguish between input-oriented principles and output-oriented principles and list at least three principles in each category.

Correct AnswerverifiedInput-oriented principles are concerned ...View AnswerShow Answer

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Which of the following is $\underline{not}$ a criticism that has been aimed at ARS 1?

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The going-concern postulate states that ...
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Postulates are basic assumptions concern...
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Proprietary theory assumes that the owne...
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Input-oriented principles are concerned ...
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