Mindanao State University - General Santos

COURSE TITLE - ACCTG 001

PROBLEM 3: MULTIPLE CHOICE

1)The conceptual framework is least applicable in which of the following cases?

1. 1. To account for a transaction that is specifically dealt with by a PFRS
   2. In resolving issues not addressed directly by a Standard
   3. In developing new financial reporting standards
   4. In reviewing and amending existing PFRSs

2. General purpose financial statements are designed to

1. 1. Meet all the information needs of the primary users.
   2. Meet all of the common needs of all primary users.
   3. Meet most of the common needs of most primary users.
   4. Meet none of the needs of users of financial information.

3. This refers to the process of incorporating in the statement of financial position or statement of comprehensive income an item that meets the definition of an element and satisfies the recognition criteria.
   1. Recognition
   2. Incorporation
   3. Definition
   4. Celebration

4. This concept is used in the recognition criteria to refer to the degree of uncertainty that the future economic benefits associated with an item will flow to or from the entity.
   1. Concept of Probability
   2. Concept of Possibility
   3. Risk Concept
   4. Concept of Uncertainty

5. If the chance that an item will cause an inflow or an outflow of the future economic benefits is lower than the chance that it will not, the inflow or outflow of future economic benefits is
   1. Probable
   2. Improbable
   3. Impossible
   4. Verifiable

6. According to the conceptual framework, this information provides an indication of how well management has discharged its responsibilities to make efficient and effective use of the reporting entity’s resources.
   1. The changes in the reporting entity’s economic resources and claims to those resources.
   2. The return the entity has produced from its economic resources.
   3. The level of the entity’s economic resources in relation to the claims thereof.
   4. The entity’s liquidity and solvency.

7. Which of the following is considered a qualitative factor in making materiality judments?
   1. 10% of total revenues
   2. 2.5% of total assets
   3. ? 25, 000 or more