Test Bank For Accounting Theory, Conceptual Issues in a Political and Economic Environment 8e Harry Wolk James Dodd John Rozycki

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Test Bank For Accounting Theory, Conceptual Issues in a Political and Economic Environment 8e Harry Wolk James Dodd John Rozycki-. Financial accounting refers to accounting information that is used by... management for decisionmaking purposes. ANSWER: False 2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of accounting standards and how they are derived. ANSWER: True 3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and hypotheses and theories. ANSWER: True 4. Hypotheses and theories are based on an informal method of investigation. ANSWER: False 5. Replacement cost as a measure of asset value is generally more reliable than historical cost. ANSWER: False 6. Accounting theory is developed and refined by the process of accounting research. ANSWER: True 7. Indirect measures are usually preferable to direct measures because they are less costly to obtain. ANSWER: False 8. Assessment measures are concerned with particular attributes of objects and are always direct measurements. ANSWER: False 9. When a direct assessment measure is used, there is always only one correct measure. ANSWER: False 10. The simplest type of measuring system is the nominal scale. ANSWER: True 11. A chart of accounts is an example of an ordinal classification. ANSWER: False Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY Accounting Theory: 8 th edition Page 2 of 11 12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference among ranks is the same. ANSWER: False 13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being measured. ANSWER: True 14. Using ratio scale measurement is possible in accounting. ANSWER: True 15. Objectivity may be defined as the degree of consensus among measurers. ANSWER: True 16. Assessment measures are not concerned with particular attributes of objects. ANSWER: False 17. Prediction measures are concerned with factors that may be indicative of future conditions. ANSWER: True 18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures. ANSWER: False 19. All accounting measurements are of either the assessment or the prediction variety. ANSWER: True 20. The need for information on a timely basis may conflict with cost constraints in some situations. ANSWER: True 21. The terms calculation and measurement both refer to the valuation of a real phenomena or attribute. ANSWER: False 22. Calculations attempt to simulate or come as close as possible to the measurement of real phenomena or attributes. ANSWER: False Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY Accounting Theory: 8 th edition Page 3 of 11 23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rather than measurements. ANSWER: True 24. There are often trade-offs between objectivity and the usefulness of numbers generated by the measurement process. ANSWER: True 25. Measurement is an integral part of accounting theory. ANSWER: True 26. Throughout the financial history of the United States, current value has been the accepted valuation system for published financial statements. ANSWER: False 27. The discounted cash flow approach can be used to determine an objective measurement for most assets and liabilities. ANSWER: False [Show More]

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