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Accounting For Equities Question Paper

Accounting For Equities

Course:Bachelor Of Commerce

Institution: University Of Nairobi question papers

Exam Year:2012

UNIVERSITY OF NAIROBI
SCHOOL OF BUSINESS
DAC 202 ACOUNTING FOR EQUITIES
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State whether the statement(s) below are TRUE (T) or FALSE (F)
1. The conceptual framework for accounting has been discovered through empirical research.

2. A conceptual framework is a coherent system of interrelated objectives and fundamentals that can lead to consistent standards.

3. The first level of the conceptual framework identifies the recognition and measurement concepts used in establishing accounting standards.

4. The IASB has issued a conceptual framework that is broadly consistent with that of other developed countries

5. Although the IASB and FASB intend to develop a joint conceptual framework, no Statements of Financial Accounting Concepts have been issued to date.

6. Decision usefulness is the underlying theme of the conceptual framework.

7. Users of financial statements are assumed to have no knowledge of business and financial accounting matters by financial statement preparers.

8. Relevance and reliability are the two primary qualities that make accounting information useful for decision making.

9. The idea of consistency does not mean that companies cannot switch from one accounting method to another.

10. Timeliness and neutrality are two ingredients of relevance.

11. Verifiability and predictive value are two ingredients of reliability.

12. Revenues, gains, and distributions to owners all increase equity.

13. Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

14. The historical cost principle would be of limited usefulness if not for the going concern assumption.

15. The economic entity assumption means that economic activity can be identified with a particular legal entity.

16. The expense recognition principle states that debits must equal credits in each transaction.

17. Revenues are realizable when assets received or held are readily convertible into cash or claims to cash.

18. Supplementary information may include details or amounts that present a different perspective from that adopted in the financial statements.

19. Companies consider only quantitative factors in determining whether an item is material.

20. Conservatism in accounting means the accountant should attempt to understate assets and income when possible.

Accounting For Equities Question Paper

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