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Finance and Budgeting

Practice Exam Questions - Bank 5

1. This GAAP principle states that errors in financial reports only require correction if they are material in amount: (Finkler, 25-26)
a. objectivity
b. material evidence
c. materiality
d. objective evidence
2. This GAAP principle says that to avoid misleading users of financial reports, firms should generally use the same accounting methods from period to period: (Finkler, 25-26)
a. repeated objectivity
b. integrity
c. materiality
d. consistency
3. This GAAP principle says that financial reports should disclose any information needed to assure that the reports are a fair presentation: (Finkler, 25-26)
a. full discloser
b. fairness
c. integrity of reports
d. consistency
4. A value of an asset based on what is paid for the asset at the time it was acquired is called the: (Finkler, 34)
a. net realizable value
b. historical or acquisition cost
c. price-level adjusted cost
d. replacement cost
5. This method of valuing an asset measures what you could get for the asset if it were sold: (Finkler, 36)
a. net realizable value
b. historical or acquisition cost
c. price-level adjusted historical cost (PLAHC)
d. replacement cost
6. This method of valuing an asset measures its worth by determining how much profit the asset will contribute to the firm in the future: (Finkler, 36)
a. net future value
b. profit futures
c. future profits
d. replacement cost
7. This method of valuing an asset measures its value based on how much it would cost to replace the asset: (Finkler, 37)
a. net future value
b. profit futures
c. future profits
d. replacement cost
8. Obligations that are to be paid in cash within a year are called: (Finkler, 42)
a. non-monetary obligations
b. monetary obligations
c. short-term obligations
d. long-term obligations
9. Obligations that are to be paid in cash more than a year in the future are called: (Finkler, 42)
a. non-monetary obligations
b. monetary obligations
c. short-term obligations
d. long-term obligations
10. Obligations that are paid as goods or services are called: (Finkler, 42)
a. non-monetary obligations
b. monetary obligations
c. short-term obligations
d. long-term obligations

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