1. Not adjusting the amounts reported in the financial statements for inflation

1. Not adjusting the amounts reported in the financial statements for inflation is an example of which basic principle of accounting?

a. Economic entity

b. going concern

c. historical cost

d. full disclosure

2. Which of the following is not a benefit associated with the FASB Conceptual Framework Project?

a. a conceptual framework should increase financial statment users understanding of and confidence in financial reporting

b. Practical problems should be more quickly solvable by reference to an existing conceptual framework.

c. a coherent set of accounting stndards and rules should result

d. business entities will need far less assistance from accountants bcuase the fnancial reporting process will be quie easy to apply

3. financial information does not demonstrate consistency when

a. firms in the same industry use different accounting methods to account for te same type of transaction

b.acompany canges its estimate of the salvage value of a fixed asset

c. a company fails to adjust its financial statements for changes in the value of the measurig unit

d. acompany changes its inventory mehod every few years in order to maximize reported income

4. what is a purpose of having a conceptual framework

a. to enable the profession to morequickly solve emerging practical problems

b. to proide a foundation from whch to build more useful standards

c. neither a or b

d. both a and b

5. During the lifetime of an entity accountants produce financial statements at arbitrary points in time in accordance with which basic accounting concept?

a. cost constraint

b. periodicity assumption

c. conservatsm constraint

d. expense recognition principle