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Finance and Budgeting

Practice Exam Questions - Bank 4

1. A set of rules used as a basis for financial reporting is called: (Finkler, 31)
a. Accepted Rules for Accountancy (ARA)
b. Generally Accepted Accounting Principles (GAAP)
c. Rules for Financial Accounting (RFA)
d. Accepted Principles of Financial Accounting (APFA)
2. Which of the following is NOT one of the key components of Generally Accepted Accounting Principles? (Finkler, 31)
a. conservation
b. matching
c. eliminating
d. going concern
3. Which of the following is NOT one of the key components of Generally Accepted Accounting Principles. (Finkler, 31)
a. liberalism
b. matching
c. materiality
d. going concern
4. Which of the following is NOT one of the key components of Generally Accepted Accounting Principles? (Finkler, 31)
a. consistency
b. separating
c. materiality
d. objective evidence
5. Which of the following is NOT one of the key components of Generally Accepted Accounting Principles? (Finkler, 31)
a. consistency
b. full disclosure
c. cost
d. subjectiveness
6. This GAAP principle states that financial statements are prepared based upon the assumption that a firm will remain in business for the foreseeable future: (Finkler, 25-26)
a. consistency
b. full disclosure
c. going concern
d. objective evidence
7. This GAAP principle states that when reporting the financial position of the firm, sufficient consideration should be given to the various risks the firm faces: (Finkler, 25-26)
a. conservatism
b. full disclosure
c. going concern
d. objective evidence
8. This GAAP principle states that expenses should be recorded in the same accounting period as the revenues that they were responsible for generating: (Finkler, 25-26)
a. conservatism
b. full disclosure
c. going concern
d. matching
9. This GAAP term is used to describe the value of what was given up to acquire an item: (Finkler, 25-26)
a. conservatism
b. cost
c. going concern
d. matching
10. This GAAP principle states that financial reports should be based on such evidence as reasonable individuals could all agree upon within relatively narrow bounds: (Finkler, 25-26)
a. conservatism
b. objectivity
c. going concern
d. objective evidence

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