Accounting Concepts and IASB's Conceptual Framework Questions

Which accounting concept states that omitting or misstating this information could influence users of the financial statements?

• The consistency concept

• The accruals basis

• The materiality concept

• The going concern concept

According to the IASB's Conceptual Framework for Financial Reporting, which TWO of the following are part of faithful representation?

• Neutrality

• Relevance

• Fair presentation

• Free from material error

Which of the following accounting concepts means that similar items should receive a similar accounting treatment?

• Conformity

• Accruals

• Matching

• Consistency

Listed below are some characteristics of financial information. Which TWO of the following are qualitative characteristics of financial information according to the IASB's Conceptual Framework?

• Relevance

• Consistency

• Faithful representation

• Accuracy

Which of the following statements describes the qualitative characteristic of faithful representation?

• Revenue earned must be matched against the expenditure incurred in earning it.

• Having information available to decision makers in time to be capable of influencing their decisions.

• The presentation and classification of items in the financial statements should stay the same from one period to the next.

• Financial information should be complete, neutral and free from error.

Listed below are some comments on accounting concepts:

(1) Financial statements always treat the business as a separate entity.

(2) Materiality means that only items having a physical existence may be recognised as assets.

(3) Provisions are estimates and therefore can be altered to make the financial results of a business more attractive to investors.

Which, if any, of these comments is correct, according to the IASB's Conceptual Framework?

• 1 only

• 2 only

• 3 only

• None of them

Which of the following statements about accounting concepts and the characteristics of financial information are correct?

• The concept of accruals requires transactions to be reflected in the financial statements once the money or its equivalent is received or paid.

• Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements.

• Based on faithful representation, it may sometimes be necessary to exclude material information from financial statements due to difficulties establishing an accurate figure.

The IASB's Conceptual Framework gives six qualitative characteristics of financial Information. What are these six characteristics?

• Relevance, Faithful representation, Comparability, Verifiability, Timeliness and Understandability

• Accuracy, Faithful representation, Comparability, Verifiability, Timeliness and Understandability

• Relevance, Faithful representation, Consistency, Verifiability. Timeliness and Understandability

• Relevance, Comparability, Consistency, Verifiability, Timeliness and Understandability

Which one of the following is NOT a qualitative characteristic of financial information according to the IASB's Conceptual Framework?

• Faithful representation

• Relevance

• Timeliness

• Accrual

According to the IASB's Conceptual Framework which of the following is NOT an objective of financial statements?

• Providing Information regarding the financial position of a business

• Providing information regarding the performance of a business

• Enabling users to assess the performance of management to aid decision making

• Providing reliable investment advice