Question

Under Statement of Financial Accounting Concepts No. 8, which of the following is an ingredient of the primary quality of faithful representation?

A.) Completeness

B.)Materiality

C.) Predictive value

D.) Understandability

2.) Business organizations have long recognized that primarily using financial measures such as sales or profitability to measure performance often fails to provide information about the factors that result in success. One of these factors is sustainability. Which of the following is not a pillar of sustainability identified in chapter 5?

A.) Environmental

B.) Physcological

C.) Economic

D.) Social

3.) According to FASB ASC 606, the transaction price:

A.)Excludes discounts, volume rebates, coupons and free products, or services

B.)Excludes time value of money if the contract involves a significant financing component

C.)Is the amount of consideration that a company expects to receive from a customer

D.) Does not consider non-cash consideration such as donations, gifts, equipment or labor

Answer 1

1 A- completeness , Ingredient of primary quality of faithful representation is completeness (that is adequate and full disclosure of all necessary information)

2. B- physiological, psychological is not the pillar of sustainability.

Economic, environmental and social are three pillars of sustainability. These three pillars are informally referred to as profits, Planet and people.

3. C- Transaction price is the amount of consideration that the company a expects to receive from a customer .
Example: Transaction price would be ,a customer goes to a shopping mall and purchase a mobile worth $700, so in this scenario, the amount of consideration is $700, viz. the transaction price , in exchange of transferring the promised goods,viz. mobile