QUESTIONS

Enumerations:
(1-5). Provide the complete set of Financial Statements (5points)

(6-7) What are the two (2) Underlying Assumptions

(8) What was the memorandum of understanding in 2002 between IASB and FASB to eliminate
differences between US standards and the IFRS called?
(9-12) What are the four (4) primary Qualitative Charateristics of
accounting information

(13-15) What are the three (3) qualities of relevant accounting information

Matching: Match the statements on the left that best describes the terminologies on the right
16. Accounting information should not omit relevant accounting a. Cash Equivalent
information
17. When conflict between actual intentions and legal form exist, the b. Predictive value
actual intention are given accounting recognition
18. An exercise of a certain degree of caution in resolving uncertainties c. Current Exchange rate
and making estimates so as not to encourage undue optimism

19. Accounting information that enable users to make forecast and plan d. Estimated Realizable
their future actions Value
20. The quality of information that confirms earlier expectations e. Substance over form
21. It provides threshold or cut-off point for recognition f. Prudence
22. Financial Statements honestly presents the results of the transactions g. Completeness

23. Short-term and highly liquid investments that are readily convertible h. Feedback value
into cash and so near their maturity that they present insignificant risk of
changes in value because of changes in interest rates

24. Cash should be written down to ____________ if the amount i. Faithful representation
recoverable is estimated to be lower than the face value if a bank or
institution is in bankruptcy or financial difficulty.

25. Cash in foreign currency is measured at _______________. j. Materiality

 ANSWERS

1. Statement of Financial Position or

Balance Sheet
2. Statement of Comprehensive Income or
Income Statement
3. Statement of Cash flows
4. Statement of Changes in Equity
5. Notes to FS or Notes
6. Accrual basis
7. Going concern assumptions
8. Norwalk Agreement

1. Understability
2. Relevance
3. Reliability
4. Comparability
1. Confirmatory/ feedback value
2. Predictive value
3. Materiality

16. g. Completeness

17. e. Substance over form

18. f. Prudence

19. b. Predictive value

20. h. Feedback value

21. j. Materiality
22. i. Faithful representation

23. a. Cash Equivalent

24. d. Estimated Realizable Value

25. c. Current Exchange rate