6) The primary purpose of the conceptual framework is to provide guidance to A)

Question

6) The primary purpose of the conceptual framework is to provide guidance to A) preparers of financial statements B) auditors C) standard setters D) CEOs s of qualitative characteristics of financial e conceptual framework, what are the two type reporting? A) fundamental and enhancing B) point-in-time and period-of-time C) recognition and measurement D) elements and principles 8) Which of the following is not a characteristic of relevance A) confirmatory value B) materiality C) free from error D) predictive value 9) elements appear on the balance sheet A) Period-of-time B) Point-in-time C) Piece-of-time D) Phase-in-time 10)) Purrfect Pets, Inc. provides animal daycare for $25 per day. Customers buy three month packages, which provide 15 days of care per month. In January they received cash payments from 10 customers. For the month of January, they will recognize revenue under the accrual basis. A) $375, $1,125 of revenue under the cash basis, and of B) $11,250, $11,250 C) $11,250, $3,750 D) $3,750, $3,750 11) The first step in the accounting cycle is to A) journalize transactions B) analyze transactions post transactions to the general ledger D) prepare a worksheet 12) Atlas Corporation sold a used machine for less than its carrying value. This transaction is a(n) A) revenue B) expense C) gain D) loss

Explanation / Answer

6) The primary purpose of the conceptual framework is to provide guidance to standard setters.

7) In conceptual framework, fundamental and enhacing are the two type of qualitative characterstics of financial reporting

8) Free from error is not a characterstic of relevance

9) Point in Time elements appear on the balancesheet

10)

Entire revenue will be recognised in January under cash basis. So revenue under Cash basis is $11250

Revenue under Accrual basis = 11250/3 = $3750

Answer :C

11) The first step in the accounting cycle is analysing transactions

12) The transaction is a loss because the machine is sold below its carrying value.

Per Day charge 25 no of months package 3 no of days in a month 15 Cash received in January 11250 (25*15*3*10)

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