Accounting information should possess two fundamental qualities which are:

relevance and faithful representation

To be treated as an accounting asset, which is NOT a characteristic?

does not involve right to control by business

MA as opposed to FA possess all of the following except

subject to accounting regulation

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TREFI Chapters 1-3

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Questions 10

Answers

1
Which of the following is NOT a current asset
Cash
Land and building
Trade Receivables
Inventory
2
Accounting information should possess two fundamental qualities which are:
timeliness and relevance
comparability and verifiability
relevance and faithful representation
understandability and comparability
3
To be treated as an accounting asset, which is NOT a characteristic?
does not involve right to control by business
must have future economic benefit
must be measurable in monetary terms
must arise from past transaction
4
The following are all major financial statements except
balance sheet
statement of retained earnings
income statement
cash flow statement
5
The relationship between risk and return is depicted as a
vertical line
positively sloping line
negative sloping line
horizontal line
6
Which is the standard lay-out for the balance sheet?
Assets + Liabilities + Equity = 0
Current Assets - Current Liabilities = Equity
Assets - Liabilities = Equity
Assets = Liabilities + Equity
7
The following financial statements are FLOW statements rather than stock statements
Income statement and Cash flow
Balance sheet and cash flow
Balance sheet and income statement
Balance sheet, income statement and cash flow
8
The key financial objective of a business is
to create value for society
to satisfy customer needs
to maximize current year's profits
to create wealth for owners
9
MA as opposed to FA possess all of the following except
contain unverifiable information
subject to accounting regulation
forward-looking
often very detailed
10
Profit from buying and selling goods without taking account of other business expenses is
incremental profit
net profit
operating profit
gross profit

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