Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
Accounting Theory Conceptual Issues in A
Political And Economic Environment 9th Edition
Harry I. -James L. - Test Bank Chapter (1 to 17)
Accounting Theory: 9th edition Page 1 of 239
,Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
Content: _
Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
Chapter 2—ACCOUNTING THEORY AND ACCOUNTING RESEARCH
Chapter 3—DEVELOPMENT OF INSTITUTIONAL STRUCTURE OF FINANCIAL
ACCOUNTING
Chapter 4—THE ECONOMICS OF FINANCIAL REPORTING REGULATION
Chapter 5—POSTULATES, PRINCIPLES, AND CONCEPTS
Chapter 6—THE SEARCH FOR OBJECTIVES
Chapter 7—THE FASB’S CONCEPTUAL FRAMEWORK
Chapter 8—USEFULNESS OF ACCOUNTING INFORMATION TO INVESTORS
AND CREDITORS
Chapter 9—UNIFORMITY AND DISCLOSURE: SOME POLICY-MAKING
DIRECTIONS
Chapter 10—INTERNATIONAL ACCOUNTING
Chapter 11—THE BALANCE SHEET
Chapter 12—THE INCOME STATEMENT
Chapter 13—STATEMENT OF CASH FLOWS
Chapter 14—INCOME TAXES AND FINANCIAL ACCOUNTING
Chapter 15—PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Chapter 16—LEASES
Chapter 17—INTERCORPORATE EQUITY INVESTMENTS
Accounting Theory: 9th edition Page 2 of 239
,Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
TRUE/FALSE
1. Financial accounting refers to accounting information that is used by management for
decisionmaking purposes.
ANSWER: F
2. Accounting theory includes the basic rules, definitions, and principles that underlie
the drafting of accounting standards and how they are derived.
ANSWER: T
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation
models, and hypotheses and theories.
ANSWER: T
4. Hypotheses and theories are based on an informal method of investigation.
ANSWER: F
5. Replacement cost as a measure of asset value is generally more reliable than
historical cost.
ANSWER: F
6. Accounting theory is developed and refined by the process of accounting research.
ANSWER: T
7. Indirect measures are usually preferable to direct measures because they are less
costly to obtain.
ANSWER: F
8. Assessment measures are concerned with particular attributes of objects and are
always direct measurements.
ANSWER: F
9. When a direct assessment measure is used, there is always only one correct measure.
ANSWER: F
10. The simplest type of measuring system is the nominal scale.
ANSWER: T
Accounting Theory: 9th edition Page 3 of 239
, Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
11. A chart of accounts is an example of an ordinal classification.
ANSWER: F
12. Numerals assigned in ordinal rankings indicate an order of preference where the
degree of preference among ranks is the same.
ANSWER: F
13. In a ratio scale, the zero point implies “nothingness,” or the absence of the quality
being measured.
ANSWER: T
14. Using ratio scale, measurement is possible in accounting.
ANSWER: T
15. Objectivity may be defined as the degree of consensus among measurers.
ANSWER: T
16. Assessment measures are not concerned with particular attributes of objects.
ANSWER: F
17. Prediction measures are concerned with factors that may be indicative of future
conditions.
ANSWER: T
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to
prediction measures.
ANSWER: F
19. All accounting measurements are of either the assessment or the prediction variety.
ANSWER: T
20. The need for information on a timely basis may conflict with cost constraints in some
situations.
ANSWER: T
21. The terms calculation and measurement both refer to the valuation of a real phenomena
or attribute.
Accounting Theory: 9th edition Page 4 of 239
Accounting Theory Conceptual Issues in A
Political And Economic Environment 9th Edition
Harry I. -James L. - Test Bank Chapter (1 to 17)
Accounting Theory: 9th edition Page 1 of 239
,Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
Content: _
Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
Chapter 2—ACCOUNTING THEORY AND ACCOUNTING RESEARCH
Chapter 3—DEVELOPMENT OF INSTITUTIONAL STRUCTURE OF FINANCIAL
ACCOUNTING
Chapter 4—THE ECONOMICS OF FINANCIAL REPORTING REGULATION
Chapter 5—POSTULATES, PRINCIPLES, AND CONCEPTS
Chapter 6—THE SEARCH FOR OBJECTIVES
Chapter 7—THE FASB’S CONCEPTUAL FRAMEWORK
Chapter 8—USEFULNESS OF ACCOUNTING INFORMATION TO INVESTORS
AND CREDITORS
Chapter 9—UNIFORMITY AND DISCLOSURE: SOME POLICY-MAKING
DIRECTIONS
Chapter 10—INTERNATIONAL ACCOUNTING
Chapter 11—THE BALANCE SHEET
Chapter 12—THE INCOME STATEMENT
Chapter 13—STATEMENT OF CASH FLOWS
Chapter 14—INCOME TAXES AND FINANCIAL ACCOUNTING
Chapter 15—PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Chapter 16—LEASES
Chapter 17—INTERCORPORATE EQUITY INVESTMENTS
Accounting Theory: 9th edition Page 2 of 239
,Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
TRUE/FALSE
1. Financial accounting refers to accounting information that is used by management for
decisionmaking purposes.
ANSWER: F
2. Accounting theory includes the basic rules, definitions, and principles that underlie
the drafting of accounting standards and how they are derived.
ANSWER: T
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation
models, and hypotheses and theories.
ANSWER: T
4. Hypotheses and theories are based on an informal method of investigation.
ANSWER: F
5. Replacement cost as a measure of asset value is generally more reliable than
historical cost.
ANSWER: F
6. Accounting theory is developed and refined by the process of accounting research.
ANSWER: T
7. Indirect measures are usually preferable to direct measures because they are less
costly to obtain.
ANSWER: F
8. Assessment measures are concerned with particular attributes of objects and are
always direct measurements.
ANSWER: F
9. When a direct assessment measure is used, there is always only one correct measure.
ANSWER: F
10. The simplest type of measuring system is the nominal scale.
ANSWER: T
Accounting Theory: 9th edition Page 3 of 239
, Chapter 1—AN INTRODUCTION TO ACCOUNTING THEORY
11. A chart of accounts is an example of an ordinal classification.
ANSWER: F
12. Numerals assigned in ordinal rankings indicate an order of preference where the
degree of preference among ranks is the same.
ANSWER: F
13. In a ratio scale, the zero point implies “nothingness,” or the absence of the quality
being measured.
ANSWER: T
14. Using ratio scale, measurement is possible in accounting.
ANSWER: T
15. Objectivity may be defined as the degree of consensus among measurers.
ANSWER: T
16. Assessment measures are not concerned with particular attributes of objects.
ANSWER: F
17. Prediction measures are concerned with factors that may be indicative of future
conditions.
ANSWER: T
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to
prediction measures.
ANSWER: F
19. All accounting measurements are of either the assessment or the prediction variety.
ANSWER: T
20. The need for information on a timely basis may conflict with cost constraints in some
situations.
ANSWER: T
21. The terms calculation and measurement both refer to the valuation of a real phenomena
or attribute.
Accounting Theory: 9th edition Page 4 of 239
