Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:100
use of the reporting entity's resources.
a. The changes in the reporting entity's economic reso
and claims to those resources.
b. The return that the entity has produced from its econor
C. The level of the entity's economic resources in relation
the claims thereof.
resources.
d. The entity's liquidity and solvency.
the following statements about the concepts in the
9. Which
Conceptual Framework is least accurate?
a. General purpose financial reports are intended to me
equally the needs of all types of external users.
b. A low probability of expected inflows or outflows of
economic benefits resulting from an asset or liability may
affect the recognition of that asset or liability, but not
necessarily its existence.
C. A high level of measurement uncertainty associated with
an asset or liability can affect the faithful representation of
that asset or liability, but not necessarily its relevance.
d. Recognition means including an item in the totals of the
financial statements when that item meets the definition of
a financial statement element and recognizing it would
result in useful information.
10. According to the revised Conceptual Framework, the degree of
uncertainty in the expected inflows or outflows of economic
benefits from an asset or liability or the degree of
measurement uncertainty associated with that asset or liability
a. does not necessarily affect the conclusion that an asset or a
liability exists, although it may affect recognition decisions
about the asset or liability.
b. greatly affects the conclusion that an asset or a liability
exists if the expectation of inflows or outflows is low or the
measurement uncertainty is high.
Transcribed Image Text:99
Conceptual Franmework
c. Heavy users
d. Slight users
affea
sts?
will C
a. Primary users
b. Secondary users
Which of the following is not one of the primary users listed in
4.
zarding
the Conceptual Framework?
Investors
c. Creditors
d. Debtors
n.
a.
stence of
b. Lenders
5. Which of the following would least likely to need general
purpose financial statements in making economic decisions?
a. Stockholders
b. Potential investors
ramewon
c. Management
d. Lenders
could
6. Which of the following is not a factor to consider when
applying the qualitative characteristics?
a. The information must be both relevant and faithfully
represented for it to be useful.
b. The enhancing qualitative characteristics only enhance the
usefulness of information but cannot make irrelevant
information or erroneous information to be useful.
Sometimes, it may be necessary to make trade-offs
between the qualitative characteristics in order to provide
useful information.
nich of
C.
dealt wi
d. To be useful, information need only to meet one, but not
necessarily all, of the qualitative characteristics.
andard
7. Which of the following is an example of a qualitative factor
used in making materiality judgments?
a. 10% of total revenues
b. 2.5% of total assets
C. P25,000 or more
ers.
S.
users.
nation.
d. The context of an item in relation to a current crisis in the
banking and insurance industry.
8. According to the Conceptual Framework, this information
provides a direct indication of how well management has
not in
e repor
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