Question

< a. buy, sell, hold equity and debt instruments b. decide whether to invest in the company. c. evaluate borrowing capacity to determine the extent of a loan to grant. d. plan and control company's operations. 6. Generally accepted accounting principles a. are fundamental truths or axioms that can be derived from laws of nature. b. derive their authority from legal court proceedings c. derive their credibility and authority from general recognition and acceptance by the accounting profession. d. have been specified in detail in the FASB conceptual framework. 7.A soundly developed conceptual framework of concepts and objectives should a. increase financial statement users' understanding of and confidence in financial reporting b. enhance comparability among companies' financial statements. c. allow new and emerging practical problems to be more quickly solved. d. All of these answer choices are correct. 8. Which of the following is not true concerning a conceptual framework in accounting? a. It should be a basis for standard-setting. b. It should allow practical problems to be solved more quickly by reference to it. c. It should be based on fundamental truths that are derived from the laws of nature d. All of these answer choices are true. What is a purpose of having a conceptual framework? To make sure that economic activity can be identified with a particular legal entity. b. To segregate activities among different companies. c. To provide comparable information for different companies. d. To enable the profession to more quickly solve emerging practical problems and to provide a foundation from which to build more useful standards. 10. Which of the following is not a benefit associated with the FASB Conceptual Framework Project? a. A conceptual framework should increase financial statement users' understanding of and confidence in financial reporting. b. Practical problems should be more quickly solvable by reference to an existing conceptual framework c. A coherent set of accounting standards and rules should result, d. Business entities will need far less assistance from accountants because the financial

Answer 1

6. Generally Accepted accounting principles - have been specified in detail in the FASB conceptual framework

7. D - All of these answer choices are correct

8. c. it should be based on fundamental truths derived from the laws of nature

9. D - to enable the profession to more quickly solve emerging practical problems and provide a foundation from which to build more useful standards

10. D. Business entities will need far less assistance from accountants