Accounting

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CHAPTER 2

21.Generally accepted accounting principles
a.are fundamental truths or axioms that can be derived from laws of nature. b.derive their authority from legal court proceedings.
c.derive their credibility and authority from general recognition and acceptance by the accounting profession. d.have been specified in detail in the FASB conceptual framework.

22.A soundly developed conceptual framework of concepts and objectives should a.increase financial statement users' understanding of and confidence in financial reporting. b.enhance comparability among companies' financial statements. c.allow new and emerging practical problems to be more quickly soluble. d.all of these.

26.The underlying theme of the conceptual framework is
a.decision usefulness.
b.understandability.
c.reliability.
d.comparability.

27.Which of the following is not an objective of financial reporting? a.To provide information about economic resources, the claims to those resources, and the changes in them. b.To provide information that is helpful to investors and creditors and other users in assessing the amounts, timing, and uncertainty of future cash flows. c.To provide information that is useful to those making investment and credit decisions. d.All of these are objectives of financial reporting.

P28.The objectives of financial reporting include all of the following except to provide information that a.is useful to the Internal Revenue Service in allocating the tax burden to the business community. b.is useful to those making investment and credit decisions. c.is helpful in assessing future cash flows.

d.identifies the economic resources (assets), the claims to those resources (liabilities), and the changes in those resources and claims.

29.Decision makers vary widely in the types of decisions they make, the methods of decision making they employ, the information they already possess or can obtain from other sources, and their...
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