Conceptual Framework & Accounting Standards
Reviewer
(Overview & CF)
1. Changes to reporting standards are primarily made in response to _________________.
2. The accounting standards used in the Philippines._______________.
3. FASB and the IASB formalized their commitment to the convergence of U.S. GAAP and
the IFRS, achieving the goal of having one set of global standards reach in October 2002
through _______________.
4. __________ refers to the process of recording the accounts or transactions of an entity.
5. The standard-setting body of IFRS Foundation with the main objectives of developing
and promoting global accounting standards.
6. Branch of accounting that focuses on general purpose financial statements.____________
7. To provide information about an entity’s economic resources, claims to those resources,
and changes in those resources. _________________
8. To provide information useful in assessing the entity’s management
stewardship._______________
9. Responsibility in the selection of appropriate accounting policies._____________
10. The proper application of accounting principles is most dependent on the ____________
11. A non-accountable event that has an accounting relevance may be recorded through a
________________
12. “One way” transaction. Ex. Donations, payment of taxes & the like. __________
13. The process by which resources are transformed into finished goods. _____________
14. An event wherein there is a reciprocal giving and receiving of an economic resources or
discharging economic obligations between and entity and external party. __________
15. An unanticipated loss from disasters or other similar events. ____________
16. An event that involves changes in economic resources or obligations of an entity caused
by an external party but does not involve transfers of resources or obligations. E.g.
obsolescenes, changes in fair values and price levels.______________
17. Financial statements are said to be prepared using a __________________
18. Refers to the principles upon which the process of accounting is based. ____________
19. Fundamental concepts or principles and basic notions that provide the foundation of the
accounting process.
20. Provide a general frame of reference by which accounting practice can be evaluate and
guide the development of new practices and procedures. ___________
5 elements in accounting
1.
4.
2.
5.
3 important activities in accounting
1.
2.
3.
3 aspects in communicating process in accounting
1.
2.
3.
i.
Basic purpose of accounting
_________________________________________________________
An economic entity may either be;
a.
b.
Economic Activities
1.__________ converting economic resources into outputs of goods and services.
2.__________ process of trading resources or obligations for other resources/obligations.
3.__________ process of using final output of the production process.
4.__________ process of allocating rights to the use of output among individuals/groups.
5.__________ setting aside rights to present consumption in exchange for rights to future
consumption.
6.__________ using current inputs to increase the stock resources available for output.
Types of information provided by accounting
1.
2.
3.
Types of accounting information classified as to user’s needs
1.
2.
Difference between financial statement and financial report
The PFRSs comprises of
1.
2.
3.
Conceptual Framework
1. The Conceptual Framework prescribes the concepts for general purpose financial
reporting. Its purpose are the following, except?
a. Assist all parties in understanding and interpreting the standards.
b. Assist to promote transparency by enhancing the international comparability and quality
of financial information.
c. Assist the International Accounting Standards Board (IASB) in developing standards that
are based on consistent concepts
d. Assist preparers in developing consistent accounting policies when no standards applies
to a particular transaction or when a standards allows a choice of accounting policies.
2. Objective of General Purpose Financial Reporting
a. To provide information about the entity’s economic resources, claims to those resources,
and changes in those resources
b. To provide information useful in assessing the entity’s management stewardship.
c. To provide information about the entity’s economic activities, process data, and
disseminate information intended to be useful in making economic decisions.
d. To provide financial information about the reporting entity that is useful to existing and
potential investors, lenders and other creditors in making decisions about providing
resources to the entity.
3. These are the primary users of Financial reporting, except?
a. Banks and other financial institutions
b. Existing and potential investors
c. Lenders
d. Other creditors
4. To meet the objectives of general purpose financial reporting, a Standard sometimes
contains requirements that departs from the Conceptual Framework.
a. True, in such cases, the departure is explained in the ‘Basis for Conclusions’ on that
Standard.
b. True, the departure in the standard is essential in meeting the objectives of general
purpose financial reporting.
c. False, the departure would mean violation to the Conceptual Framework
d. False, the departure is not practice according to the standard
5. The Conceptual Framework may be revised from time to time based on the IASB’s
experience
a. True, it can be revised from time to time which results to changes in the Standards
b. False, the Conceptual Framework cannot be revised because it would confused the
standards
c. True, however, the revisions do not automatically result to changes in the standards
d. False, the revision would make the standard more difficult to understand
6. These user cannot demand information directly from the reporting entities.
a. Investors
b. Management
c.
d.
7.
a.
Primary users
Secondary users
Which of these statements is false
General purpose financial reports do not directly show the value of a reporting entity.
However, they provide information that helps users in estimating the value of an entity.
b. Expectation about returns, in turn depend on assessments of the entity’s prospect for
future net cash inflows and management stewardship.
c. The primary user’s decision about providing resources to the entity involve decisions on
buying, selling or holding investments. Providing or settling loans and other forms of
credit; or exercising voting or similar rights that could influence management’s actions
towards the use of the entity’s economic resources.
d. Primary users only need information about the economic resources of the entity, claims
against the entity and changes in those resources and claims.
8. Refers to an entity’s ability to pay short-term obligations
a. Solvency
b. Liquidity
c. Obsolenscenes
d. Flexibility
9. May cause difficulty in obtaining additional financing
a. Provisions
b. Expenses
c. Overleverage
d. Non-controlling interest
10. Provides indication on how well management has efficiently and effectively used the
entity’s resources.
a. Assets
b. Return
c. Expenses
d. Equity