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Chapter 2 CPA Exam Practice questions with answers Graded A+
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Chapter 2 CPA Exam Practice
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Chapter 2 CPA Exam PracticeThe objectives and concepts for use in developing standards of financial accounting and
reporting. - answerWhat is the conceptual framework intended to establish?
The needs of the users of the information. - answerAccording to the conceptual
framework, the objectives of financial reporting for business enterprises are based on:
Confirmatory value. - answerAccording to the FASB conceptual framework, which of the
following is not an enhancing qualitative characteristic?
Relevance. - answerUnder Statement of Financial Accounting Concepts (SFAC) 8,
predictive value is an ingredient of the fundamental quality of
Timeliness. - answerUnder Statement of Financial Accounting Concepts (SFAC) 8,
which of the following relates to both relevance and faithful representation?
Consistency: Yes
Verifiability: Yes - answerAccording to the FASB Conceptual Framework, which of the
following relates to both relevance and faithful representation?
Neutrality. - answerAccording to the FASB Conceptual Framework, what does the
concept of faithful representation in financial reporting include?
Gains: Yes
Gross Margin: Yes - answerUnder Statements of Financial Accounting Concepts,
comprehensive income includes which of the following?
Recognition - answerAccording to the conceptual framework, the process of reporting
an item in the financial statements of an entity is:
Sales commissions. - answerWhich of the following is an example of the expense
recognition principle of associating cause and effect?
Matching. - answerAnde Co. estimates uncollectible accounts expense using the ratio of
past actual losses from uncollectible accounts to past net credit sales, adjusted for
anticipated conditions. The practice follows the accounting concept of:
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