Seatwork 1&2 BSA 1A

On Day 1, a customer buys goods from Entity A and promised to pay the sale price on Day 30. Entity A recognizes sales revenue on Day 1 rather than on Day 30. This is an application of accounting concept of accrual basis.

• TRUE

• FALSE

The entity should recognize an asset for land received from a donation.

• TRUE

• FALSE

To meet the objectives of general purpose financial reporting, the Standard sometimes contains requirements that depart from the Conceptual Framework.

• TRUE

• FALSE

Under the cost-benefit concept, the cost of processing and communicating information should exceed the benefits derived from it.

• TRUE

• FALSE

All information presented in the financial statements sourced from the accounting records of the entity.

• TRUE

• FALSE

Entity A enters into a purchase commitment with Entity B (a seller). Entity A has already paid the purchase price while Entity B did not yet deliver the goods. Entity A’s combined right and obligation changes to a liability.

• TRUE

• FALSE

Information has this qualitative characteristics of comparability if different, knowledgeable and independent observers could reach a consensus, although not necessarily complete agreement, that a particular depiction is a faithful representation.

• TRUE

• FALSE

Revenue may result from a decrease in liability from primary operations.

• TRUE

• FALSE

An increase in the carrying amount of an asset could not possibly result in the recognition of an expense.

• TRUE

• FALSE

Mr. Mwa, CPA, is a professor in a university where he teaches mainly home economics, music and physical education. Those subjects require that the teacher must be awesome. Mr. Mwa is also frequently invited as a judge in beauty pageants and singing contests and as a referee in mixed martial arts competitions. Mr. Mwa is considered to be practicing accountancy in academe sector.

• TRUE

• FALSE