Conceptual Framework for Financial Accounting

Part-A
Brief Questions
6th Part

41.The accounting constraint that means that when in doubt the accountant should choose the method that will be least likely to overstate assets and income is called...............?
Ans:Conservatism.

42.The organization that issues International Accounting Standards in the
a.Financial Accounting Standards Board .
b.International Accounting Standards Board.
c.International Auditing Standards Committee.(Ans)
d.None of the above.
Ans:B. Because International Accounting Standards Board (IASB) issues International Accounting Standards(IAS).

43.Indicate whether each of the following statements is true or false.
(a)'Generally Accepted' means that these principles must have "substantial authoritative support"
(b)GAAP is a set of rules and practices established by the accounting profession to serve as a general guide for financial reporting purposes
(c)Substantial authoritative support for GAAP usually comes from two standard-setting bodies: the FASB and the IRS.
Ans: (a) True  (b)True (c)False.

44.According to the FASB's conceptual framework,which of the following are objectives of financial (Use 'yes' or 'No' to answer this question.)
(a)Provide information that identifies the economic resources(assets),the claims to those resources (liabilities) and the changes in those resources and claims.
(b)Provide information that is helpful in assessing past cash flows and stock prices.
(c)Provide information that is useful to those making investment and credit decisions.