The Arch Doc Elite
Test Bank for Accounting Theory:
Conceptual Issues in a Political and
Economic Environment 9th Edition
by Harry I. Wolk, James L. Dodd & John
J. Rozycki
100% Verified Answers| A+ PASS
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, The Arch Doc Elite
Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
TRUE/FALSE QUESTIONS
1. Financial accounting refers to accounting information that is used by management for decision- making
purposes.
ANSWER: False
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of
accounting standards and how they are derived.
ANSWER: True
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and
hypotheses and theories.
ANSWER: True
4. Hypotheses and theories are based on an informal method of investigation.
ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
ANSWER: False
6. Accounting theory is developed and refined by the process of accounting research.
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ANSWER: True
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7. Indirect measures are usually preferable to direct measures because they are less costly to obtain.
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ANSWER: False
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8. Assessment measures are concerned with particular attributes of objects and are always direct
measurements.
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ANSWER: False
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9. When a direct assessment measure is used, there is always only one correct measure.
ANSWER: False
10. The simplest type of measuring system is the nominal scale.
ANSWER: True
11. A chart of accounts is an example of an ordinal classification.
ANSWER: False
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference
among ranks is the same.
ANSWER: False
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being measured.
ANSWER: True
14. Using ratio scale measurement is possible in accounting.
ANSWER: True
15. Objectivity may be defined as the degree of consensus among measurers.
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ANSWER: True
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16. Assessment measures are not concerned with particular attributes of objects.
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ANSWER: False
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17. Prediction measures are concerned with factors that may be indicative of future conditions.
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ANSWER: True
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18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures.
ANSWER: False
19. All accounting measurements are of either the assessment or the prediction variety.
ANSWER: True
20. The need for information on a timely basis may conflict with cost constraints in some situations.
ANSWER: True
21. The terms calculation and measurement both refer to the valuation of a real phenomena or attribute.
ANSWER: False
22. Calculations attempt to simulate or come as close as possible to the measurement of real phenomena
or attributes.
ANSWER: False
23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rather
than measurements.
ANSWER: True
24. There are often trade-offs between objectivity and the usefulness of numbers generated by the
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measurement process.
ANSWER: True
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25. Measurement is an integral part of accounting theory.
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ANSWER: True
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26. Throughout the financial history of the United States, current value has been the accepted valuation
system for published financial statements.
ANSWER: False
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4|Page
e
Test Bank for Accounting Theory:
Conceptual Issues in a Political and
Economic Environment 9th Edition
by Harry I. Wolk, James L. Dodd & John
J. Rozycki
100% Verified Answers| A+ PASS
Th
e
Ar
ch
Do
cE
lit
1|Page
e
, The Arch Doc Elite
Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
TRUE/FALSE QUESTIONS
1. Financial accounting refers to accounting information that is used by management for decision- making
purposes.
ANSWER: False
2. Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of
accounting standards and how they are derived.
ANSWER: True
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and
hypotheses and theories.
ANSWER: True
4. Hypotheses and theories are based on an informal method of investigation.
ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
ANSWER: False
6. Accounting theory is developed and refined by the process of accounting research.
Th
ANSWER: True
e
7. Indirect measures are usually preferable to direct measures because they are less costly to obtain.
Ar
ANSWER: False
ch
8. Assessment measures are concerned with particular attributes of objects and are always direct
measurements.
Do
ANSWER: False
cE
lit
2|Page
e
, The Arch Doc Elite
9. When a direct assessment measure is used, there is always only one correct measure.
ANSWER: False
10. The simplest type of measuring system is the nominal scale.
ANSWER: True
11. A chart of accounts is an example of an ordinal classification.
ANSWER: False
12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference
among ranks is the same.
ANSWER: False
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being measured.
ANSWER: True
14. Using ratio scale measurement is possible in accounting.
ANSWER: True
15. Objectivity may be defined as the degree of consensus among measurers.
Th
ANSWER: True
e
16. Assessment measures are not concerned with particular attributes of objects.
Ar
ANSWER: False
ch
17. Prediction measures are concerned with factors that may be indicative of future conditions.
Do
ANSWER: True
cE
lit
3|Page
e
, The Arch Doc Elite
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures.
ANSWER: False
19. All accounting measurements are of either the assessment or the prediction variety.
ANSWER: True
20. The need for information on a timely basis may conflict with cost constraints in some situations.
ANSWER: True
21. The terms calculation and measurement both refer to the valuation of a real phenomena or attribute.
ANSWER: False
22. Calculations attempt to simulate or come as close as possible to the measurement of real phenomena
or attributes.
ANSWER: False
23. FIFO and LIFO measures of cost of goods sold and inventories are examples of calculations rather
than measurements.
ANSWER: True
24. There are often trade-offs between objectivity and the usefulness of numbers generated by the
Th
measurement process.
ANSWER: True
e
Ar
25. Measurement is an integral part of accounting theory.
ch
ANSWER: True
Do
26. Throughout the financial history of the United States, current value has been the accepted valuation
system for published financial statements.
ANSWER: False
cE
lit
4|Page
e
