9.

The Conceptual Framework describes prudence as _______________.

A.	The exercise of caution when making judgements under conditions of uncertainty
B.	A bias towards understating assets or income and towards overstating liabilities or expenses
C.	A preference towards the earlier recognition of expenses and liabilities than of income and assets
D.	A mechanism for smoothing profits over time (understate profits in good years and overstate profits in bad years

10.

Which statement is included in the Conceptual Framework?

A.	Relevance is a fundamental qualitative characteristic of useful financial information
B.	Financial information without both relevance and faithful representation is not useful
C.	Enhancing qualitative characteristics cannot make information useful if that information is irrelevant or does not provide a faithful representation of what it purports to represent
D.	All of the above

11.

The fundamental qualitative characteristics of useful financial information are _______________.

A.	Comparability and relevance
B.	Relevance and reliability
C.	Relevance, reliability and comparability
D.	Relevance and faithful representation

12.

Consolidated financial statements provides information about the assets, liabilities, equity, income and expenses of both the parent and its subsidiaries as _______________.

A.	Separate reporting entities
B.	A partnership
C.	A single reporting entity
D.	A legal entity

13.

What drives the determination of the boundary of a reporting entity that is not a legal entity and does not comprise only legal entities all linked by a parent-subsidiary relationship?

A.	Managements choice
B.	Legal form of the reporting entity
C.	Information needs of the primary users of the reporting entity
D.	All of the above

14.

A reporting entity can be _______________.

A.	A portion of an entity
B.	A single entity
C.	More than one entity
D.	All of the above

15.

In explaining the meaning of the term obligation in the definition of a liability, the Conceptual Framework states _______________.

A.	That an obligation is a duty or responsibility that an entity has no practical abolity to avoid
B.	That an obligation can arise from a duty or responsibility conditional o a future action that the entity itself may take, if the entity has no practical ability to avoid taking that action
C.	That an obligation can arise from an entitys customary practices, published policies or specific statements, if the entity has no practical ability to avoid those practices, policies or statements
D.	All of the above