Problem 1. The FASB's standard-setting process includes, in the correct order:
- Exposure draft, research, discussion memorandum, SFAS.
- Research, exposure draft, discussion memorandum, SFAS.
- Research, discussion memorandum, exposure draft, SFAS.
- Discussion memorandum, research, exposure draft, SFAS.
Problem 2. The FASB's conceptual framework's qualitative characteristics of accounting information include:
- Full disclosure.
- Relevance.
- Going concern.
- Historical cost.
Problem 3. The conceptual framework's qualitative characteristic of reliability includes:
- Predictive value.
- Neutrality.
- Feedback value.
- Timeliness.
Problem 4. Maltec Corporation has started placing its quarterly financial statements on its web page, thereby reducing by ten days the time to get information to investors and creditors. The qualitative concept improved is:
- Comparability.
- Consistency.
- Relevance.
- Reliability.
Problem 5. A sale on account would be recorded by:
- Debiting revenue.
- Crediting assets.
- Crediting liabilities.
- Debiting assets.
Problem 6. An example of a contra account is:
- Depreciation expense.
- Accounts receivable.
- Sales revenue.
- Accumulated depreciation.
Problem 7. Accrued expenses:
- Are generally paid in services rather than cash.
- Result from payment before services are received.
- Result from services received before payment.
- Are not a liability.
Problem 8. A future economic benefit owned or controlled by an entity is:
- A revenue.
- An asset.
- A liability.
- A contra asset until used.
Problem 9. The adjusting entry required to record accrued expenses includes:
- A credit to cash.
- A debit to an asset.
- A credit to an asset.
- A credit to liability.
Problem 10. Under the realization principle, revenue should not be recognized until the earnings process is deemed virtually complete and:
- Revenue is realized.
- Any receivable is collected.
- Collection is reasonably certain.
- Collection is absolutely assured.