100% found this document useful (1 vote) 1K views 7 pages -TOA Long Quiz 1 (Answer Key).pdf © © All Rights Reserved PDF, TXT or read online from Scribd Did you find this document useful?100% found this document useful (1 vote) 1K views7 pages TOA Long Quiz 1 (Answer Key) PDFOriginal Title:-TOA Long Quiz 1 (Answer Key).pdf Jump to Page You are on page 1of 7 You're Reading a Free Preview Reward Your CuriosityEverything you want to read. Anytime. Anywhere. Any device. No Commitment. Cancel anytime.  CONCEPTUAL FRAMEWORK AND ACCTG STANDARDS 1.3 1.Under this qualitative characteristic, users are assumed to have a reasonable knowledge of business activities and willingness to study the information with reasonable diligence. a.Relevance b.Faithful representation c. Understandability d.Comparability 2.Which of the following statements is incorrect concerning materiality? a.Materiality can be assessed quantitatively or qualitatively b.There are no specific materiality thresholds provided under the PFRSs c.Materiality is a matter of judgment d.Materiality is a quantitative matter. It should never be assessed qualitatively. 3.The elements of faithful representation do not include a.comparability. b.neutrality. c.completeness. d.free from error. 4.The ability through consensus among measurers to ensure that information represents what it purports to represent is an example of the concept of a. relevance. b.comparability. c.verifiability. d.feedback value. 5.According to the Conceptual Framework, the pervasive constraint on the information that can be provided by financial reporting is a. materiality. b.historical. c.cost-benefit. d.going concern. 6.The element that is related to the measurement of an entity’s financial performance is a. income. b.expenses. c.a and b d.neither a nor b 7.According to the revised Conceptual Framework, an item is recognized if a.it meets the definition of an asset, liability, equity, income or expense. b.recognizing it would provide useful information. c. it is probable that the item will result to an inflow or outflow of economic benefits and its cost can be measured reliably. d.a and b 8.Which of the following may result to an expense? a.Increase in asset b. Decrease in liability Which of the following is incorrect on the concept of materiality?The correct answer is option (d) Materiality is a matter of professional judgment. Option (a) is incorrect. Materiality is based on the auditor's professional judgment, not on AICPA.
What are the concepts of materiality?Materiality concept in accounting refers to the concept that all the material items should be reported properly in the financial statements. Material items are considered as those items whose inclusion or exclusion results in significant changes in the decision making for the users of business information.
What are the 3 types of materiality?Overall Materiality. When establishing the overall audit strategy, the auditor determines materiality for the financial statements as a whole. ... . Performance Materiality. ... . Specific Materiality. ... . Specific Performance Materiality.. What is the concept of materiality in accounting?Materiality is an accounting principle which states that all items that are reasonably likely to impact investors' decision-making must be recorded or reported in detail in a business's financial statements using GAAP standards.
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Which of the following statements is incorrect concerning the concept of materiality?
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