1. One of the elements on a financial statement is comprehensive income. Comprehensive income excludes changes in equity resulting from which of the following?
(a) Loss from discontinued operations
(b) Unrealized loss from foreign currency translation
(c) Dividends paid to stockholders
(d) Unrealized loss on investments in noncurrent marketable equity securities
2. According to the FASB conceptual framework, the objectives of financial reporting for business enterprises are based on
(a) Generally accepted accounting principles.
(b) Reporting on management’s stewardship.
(c) The need for conservatism.
(d) The needs of users of the information.
3. Statements of Financial Accounting Concepts are intended to establish
(a) Generally accepted accounting principles in financial reporting by business enterprises.
(b) The meaning of “Present fairly in accordance with generally accepted accounting principles.”
(c) The objectives and concepts for use in developing standards of financial accounting and reporting.
(d) The hierarchy of sources of generally accepted accounting principles.
4. According to Statements of Financial Accounting Concepts, neutrality is an ingredient of reliability? Of relevance?
(a) Yes Yes
(b) Yes No
(c) No Yes
(d) No No
5. According to the FASB conceptual framework, which of the following statements conforms to the realization concept?
(a) Equipment depreciation was assigned to a production department and then to product unit costs.
(b) Depreciated equipment was sold in exchange for a note receivable.
(c) Cash was collected on accounts receivable.
(d) Product unit costs were assigned to cost of goods sold when the units were sold.