ACCTy1080yFAT-Test-Bank
Chaptery1y–
yIntroductionytoyfinancialyaccountingytheoryyTopicy1
1. Whichyofytheyfollowingyisytrueyaboutytheoriesyinygeneral?
A. Theoriesycanyincludeyanyycoherentysetyofyideasyorystatementsytoyexplain,yoryprovideyguidancey
respectyof,ycertainyphenomena.
B. Theoriesymustybeyempiricallyybasedytoydescribeywhatyis,yratherythanywhatyshouldybe.
C. Theoriesymustybeybasedyonyinductiveyreasoningytoyprovideyaygeneralisationyoryprediction.
D. Allyofytheygivenyoptionsyareycorrect.
2. AccordingytoyThoulessy(1974),ythey'tricks'ysomeywritersyoftenyuseytoydistractyreadersyfromy
limitationsyinytheylogicyofyanyargumentyorytheoryyare:
A. Usingyemotionally-tonedywords
B. Evasionyofyaysoundyrefutationyofyanyargumentybyyuseyofyaysophisticatedyformula
C. Changingytheymeaningyofyaytermyduringytheycourseyofyanyargument
D. Allyofytheygivenyoptionsyareycorrect.
3. Normativeyaccountingytheoriesyandyresearchyseekyto:
A. Explainyandypredictyparticularyphenomenaybasedyonyobservation
B. Prescribeyparticularyapproachesynotydrivenybyyexistingypractices
C. Describeywhatyisynormal,yorygenerallyyaccepted,ypractice
D. Allyofytheygivenyoptionsyareycorrect.
4. Aytheoryythatypredictsythat,yifycertainyconditionsyareymetythenyparticularyaccountingypracticesy
willybeyobserved,yisyanyexampleyof:
A. PositiveyAccountingyTheory
B. NegativeyAccountingyTheory
C. NormativeyAccountingyTheory
D. DescriptiveyAccountingyTheory
5. WhichyofytheyfollowingyisynotyassumedyinyPositiveyAccountingyTheory?
A. Individualsy(includingymanagers)yareyeconomicallyyrationalyinytheirybehaviour.
B. Individualsy(includingymanagers)yareyprimarilyymotivatedybyyself-interest.
C. Theynaturalyobjectiveyofymanagersyisytoymaximiseytheywealthyofytheyfirm.
D. Managersyareynotyindifferentyinyselectingyaccountingymethodsytoyuse.
6. Aytheoryy(orymodel)ythatystatesythatytheymostyusefulyinformationyforyeconomicydecisionymakiny
isytheycurrentycashyequivalents,yasymeasuredybyytheycurrentynetymarketyvalues,yis:
A. CurrentyPriceyAccounting
B. ContinuouslyyContemporaryyAccountingyTheory
C. CurrentyCostyAccountingyTheory
D. ReplacementyValueyAccountingyTheory
,ACCTy1080yFAT-Test-Bank
7. OneycriticismyofyPositiveyAccountingyTheoryyisythatyitytellsyusynothingyabout:
A. Whetherytheypracticeyorymethodybeingyusedyisytheymostyefficient
B. Whetherytheypracticeyorymethodybeingyusedyisytheymostyequitable
C. Whichymethodyayfirmyshouldyuse
D. Allyofytheygivenyoptionsyareycorrect.
8. Whichyofytheyfollowingyisynotyanyexampleyofyaynormativeyaccountingytheoryyoryresearch?
A. Conceptualyframeworksyofyaccounting
B. Criticalyperspectivesyofyaccountingypractice
C. Capitalymarkets-basedy(securityyprice)yresearch
D. Trueyincomeytheories
9. Inyevaluatingytheoriesyofyaccounting,ywhichyofytheyfollowingyisynotytrue?
A. Differentytheoriesyareyoftenytheyresultyofyworkingyinydifferentyparadigms,ywhichyprovidey
greatlyydifferentyperspectives.
B. PositiveyAccountingyTheoryyisyanyexampleyofyaytheoryythatyisyvalueyfree.
C. Selectingyaytheory,ytopic,ydesignyorymethodyforyresearchyisybasedyonyvalueyjudgements.
D. Allytheoriesyofyaccounting,yandyassumptionsyonywhichytheyyareybased,yareyabstractionsyofy
reality,yandysoychoiceyisybasedyonyhowycloselyytheytheoryyfitsyouryownyperceptions.
10. Whichyofytheyfollowingystatementsyisytrueyaboutyprovingyaytheory?
A. AnyacceptedyPositiveyAccountingyTheoryypurportsytoyprovideysoundypredictionsytheymajorityy
theytime.
B. AnyacceptedyPositiveyAccountingyTheoryythatypurportsytoyexplainyandypredict,ymustyholdytruey
allycases.
C. AyPositiveyAccountingyTheoryydoesynotyneedytoybeytestedyoryproven.
D. AnyacceptedyPositiveyAccountingyTheoryyhasynoy'exceptionsytoytheyrule'.
11. Whichyofytheyfollowingystatementsyalignsywithytheyviewsyofy'Falsificationists',ysuchyasyPoppery
andyothers?
A. Hypothesesyareyproposedybyyguessing,ywithoutyguidanceyfromyexistingytheories.
B. Ityisypossibleytoystateythatyaytheoryyisytrue.
C. Hypothesesymustybeystatedyinyayformythatyassumesytheyyareytrue,yuntilyevidenceythatyisynoty
supportiveyrejectsythem.
D. Allytheoriesyareyfalseyuntilytheyyareyprovedytoybeytrue.
12. Whichyofytheyfollowingystatementsybestyexplainsytheyroleyofylogicyinyaytheoreticalyargument?
A. Asylongyasytheypremisesyofyanyargumentyfollowylogicallyyfromyoneytoytheyother,ytheyconclusioy
willybeycorrect.
B. Ayconclusionycanyonlyybeytrueytoytheyextentythatyweyacceptythatytheypremisesyonywhichyityisy
basedyareytrue.
C. Argumentsycannotybeyrejectedyonytheybasisyofyobservation;yonlyyonywhetherytheyyareylogicaly
not.
D. Allytheoriesyandytheiryargumentsymustycorrespondywithyactualyobservationyofycurrent
,ACCTy1080yFAT-Test-Bank
practices,yoryreal-worldyphenomena,ytoybeylogical.
13. Theyfailureyofyayparticularystudyytoysupportyaytheory:
A. Providesytheybasisyforyrejectingytheytheoryyasyuselessyoryinsignificant
B. Meansythatytheyparticularystudyymustyhaveyflawsyinyitsydesignyoryexecutionyinyspecifyingyandy
collectingytheydata
C. Threatensytheytheory,yifyrepeatedyorymoreyrefinedystudiesyfailytoysupportyitywithyempiricaly
evidence
D. Meansythatytheyhypothesisywasytooybroad,yandydidynotyspecifyytheyparticularycircumstancesyany
conditionsyinyenoughydetail
14. Whichyofytheyfollowingystatementsyisycorrectyaboutygeneralisingytheyfindingsyofyaystudyytoythey
generalypopulation,ybasedyonyparticularysamples?
A. Ityisynotypossibleytoymakeygeneralisationsyunlessyyouystudyytheyentireypopulation.
B. Ityisypossibleytoymakeygeneralisationsyasylongyasytheysampleyisyrepresentativeyofythey
population.
C. Ityisypossibleytoymakeygeneralisationsyasylongyasytheysampleyincludesyatyleasty50yperycentyofythey
population.
D. Ityisypossibleytoymakeygeneralisationsyifytheysampleyisyrepresentative,yandyitsysizeyallowsy
statisticalyinferencesytoybeymade.
15. Inyevaluatingyvariousyresearchystudies,yityisyimportantytoyfirstyconsider:
A. Theylogicyofytheyargumentyandyhowyityisytested
B. Theylogicyofytheyargumentyandytheyassumptionsyonywhichyityisybased
C. Theypurposeyofytheystudyyandytheytypeyofytheoryyonywhichyityisybased
D. Whetherytheydataycollectedyrepresentsyayvalidymeasureyofytheytheoreticalyvariablesyinyquestio
16. Theoriesyandymodelsyinytheysocialysciencesydifferyfromytheoriesyinytheypureysciencesybecause:
A. Theoriesyaboutyhumanybehaviourycannotybeyexpectedytoyapplyyallytheytime,ylikeysomeynaturaly
scienceytheories.
B. Aynumberyofytheoriesymayybeyavailableytoydescribe,yoryprovideyaydifferentyperspectiveyon,yay
particularyphenomenon.
C. Notyallytheoriesyinysocialyscienceyhaveypredictionsythatycanybeytested.
D. Allyofytheygivenyoptionsyareycorrect.
17. Theysequentialystagesyofyinductiveyreasoningyare:
A. Principles,yobjectives,yassumptionsyandypractice
B. Practice,yprinciples,yassumptionsyandyobjectives
C. Objectives,yassumptions,yprinciplesyandydefinitions
D. Assumptions,yobjectives,yprinciplesyandydefinitions
18. Whichyofytheyfollowingytermsydescribesyayrelationshipythatyisyarguedyfromytheyspecificy(ory
particular)ytoytheygeneral?
, ACCTy1080yFAT-Test-Bank
A. Scientificyreasoning
B. Inductiveyreasoning
C. Deductiveyreasoning
D. Logicalyreasoning
19. Whichyofytheyfollowingyisyanyexampleyofyaydominantyparadigmyinyaccountingypriorytoy1960?
A. Currentycostyaccounting
B. Conceptualyframeworkyofyaccounting
C. Historicalycostyaccounting
D. Continuouslyycontemporaryyaccounting
20. Whatyisyaydeductiveytheoryyoryargumentyjudgedyby?
A. Logicyandyassumptions
B. Observableyreal-worldyphenomena
C. Empiricalyevidenceyofyrelevantydataytoytestytheytheory
D. Allyofytheygivenyoptionsyareycorrect.
21. Anyinductiveytheoryyoryargument:
A. Reliesyonyobservationyofyreal-worldyphenomena
B. Establishesyitsytruthyoryfalsityybyycollectingyobjectiveyempiricalyevidence
C. Arguesyfromytheyspecificytoyformygeneralisations
D. Allyofytheygivenyoptionsyareycorrect.
22. Whichyofytheyfollowingyisynotyaydescriptionyofyayparadigm?
A. Ityisyaymodelyforytheyformulationyandyresolutionyofyresearchyproblems.
B. Ityisyayschoolyofythoughtyoryayprincipleybyywhichyaygroupyofyresearchersyoperate.
C. Ityisyaycollectionyofyunrelatedytheories.
D. Ityoffersyaysystematicyapproachytoyraiseyquestionsyandytoyframeyanswers.
23. Theysequentialystagesyofydeductiveyreasoningyare:
A. Principles,yobjectives,yassumptionsyandypractice
B. Practice,yprinciples,yassumptionsyandyobjectives
C. Objectives,yassumptions,yprinciplesyandydefinitions
D. Assumptions,yobjectives,yprinciplesyandydefinitions
24. Allyliabilityyaccountsyhaveycreditybalances.yTheyaccountsyreceivableyaccountyisyayliabilityyacco
unt.yTherefore,ytheyaccountsyreceivableyaccountyhasyaycreditybalance.yWhichyofytheyfollowingystat
ementsyisycorrectywithyrespectytoytheyaboveyargument?
A. Theyargumentyfollowsyaylogicalyandyclearyreasoning.
B. Theyargumentyisyillogical.
C. Theyconclusionyreachedyisyclearlyytrue.
D. Theyclassificationyofyaccountsyreceivableyisyconsistentywithytheyobservedyclassificationyofy
receivables.
Chaptery1y–
yIntroductionytoyfinancialyaccountingytheoryyTopicy1
1. Whichyofytheyfollowingyisytrueyaboutytheoriesyinygeneral?
A. Theoriesycanyincludeyanyycoherentysetyofyideasyorystatementsytoyexplain,yoryprovideyguidancey
respectyof,ycertainyphenomena.
B. Theoriesymustybeyempiricallyybasedytoydescribeywhatyis,yratherythanywhatyshouldybe.
C. Theoriesymustybeybasedyonyinductiveyreasoningytoyprovideyaygeneralisationyoryprediction.
D. Allyofytheygivenyoptionsyareycorrect.
2. AccordingytoyThoulessy(1974),ythey'tricks'ysomeywritersyoftenyuseytoydistractyreadersyfromy
limitationsyinytheylogicyofyanyargumentyorytheoryyare:
A. Usingyemotionally-tonedywords
B. Evasionyofyaysoundyrefutationyofyanyargumentybyyuseyofyaysophisticatedyformula
C. Changingytheymeaningyofyaytermyduringytheycourseyofyanyargument
D. Allyofytheygivenyoptionsyareycorrect.
3. Normativeyaccountingytheoriesyandyresearchyseekyto:
A. Explainyandypredictyparticularyphenomenaybasedyonyobservation
B. Prescribeyparticularyapproachesynotydrivenybyyexistingypractices
C. Describeywhatyisynormal,yorygenerallyyaccepted,ypractice
D. Allyofytheygivenyoptionsyareycorrect.
4. Aytheoryythatypredictsythat,yifycertainyconditionsyareymetythenyparticularyaccountingypracticesy
willybeyobserved,yisyanyexampleyof:
A. PositiveyAccountingyTheory
B. NegativeyAccountingyTheory
C. NormativeyAccountingyTheory
D. DescriptiveyAccountingyTheory
5. WhichyofytheyfollowingyisynotyassumedyinyPositiveyAccountingyTheory?
A. Individualsy(includingymanagers)yareyeconomicallyyrationalyinytheirybehaviour.
B. Individualsy(includingymanagers)yareyprimarilyymotivatedybyyself-interest.
C. Theynaturalyobjectiveyofymanagersyisytoymaximiseytheywealthyofytheyfirm.
D. Managersyareynotyindifferentyinyselectingyaccountingymethodsytoyuse.
6. Aytheoryy(orymodel)ythatystatesythatytheymostyusefulyinformationyforyeconomicydecisionymakiny
isytheycurrentycashyequivalents,yasymeasuredybyytheycurrentynetymarketyvalues,yis:
A. CurrentyPriceyAccounting
B. ContinuouslyyContemporaryyAccountingyTheory
C. CurrentyCostyAccountingyTheory
D. ReplacementyValueyAccountingyTheory
,ACCTy1080yFAT-Test-Bank
7. OneycriticismyofyPositiveyAccountingyTheoryyisythatyitytellsyusynothingyabout:
A. Whetherytheypracticeyorymethodybeingyusedyisytheymostyefficient
B. Whetherytheypracticeyorymethodybeingyusedyisytheymostyequitable
C. Whichymethodyayfirmyshouldyuse
D. Allyofytheygivenyoptionsyareycorrect.
8. Whichyofytheyfollowingyisynotyanyexampleyofyaynormativeyaccountingytheoryyoryresearch?
A. Conceptualyframeworksyofyaccounting
B. Criticalyperspectivesyofyaccountingypractice
C. Capitalymarkets-basedy(securityyprice)yresearch
D. Trueyincomeytheories
9. Inyevaluatingytheoriesyofyaccounting,ywhichyofytheyfollowingyisynotytrue?
A. Differentytheoriesyareyoftenytheyresultyofyworkingyinydifferentyparadigms,ywhichyprovidey
greatlyydifferentyperspectives.
B. PositiveyAccountingyTheoryyisyanyexampleyofyaytheoryythatyisyvalueyfree.
C. Selectingyaytheory,ytopic,ydesignyorymethodyforyresearchyisybasedyonyvalueyjudgements.
D. Allytheoriesyofyaccounting,yandyassumptionsyonywhichytheyyareybased,yareyabstractionsyofy
reality,yandysoychoiceyisybasedyonyhowycloselyytheytheoryyfitsyouryownyperceptions.
10. Whichyofytheyfollowingystatementsyisytrueyaboutyprovingyaytheory?
A. AnyacceptedyPositiveyAccountingyTheoryypurportsytoyprovideysoundypredictionsytheymajorityy
theytime.
B. AnyacceptedyPositiveyAccountingyTheoryythatypurportsytoyexplainyandypredict,ymustyholdytruey
allycases.
C. AyPositiveyAccountingyTheoryydoesynotyneedytoybeytestedyoryproven.
D. AnyacceptedyPositiveyAccountingyTheoryyhasynoy'exceptionsytoytheyrule'.
11. Whichyofytheyfollowingystatementsyalignsywithytheyviewsyofy'Falsificationists',ysuchyasyPoppery
andyothers?
A. Hypothesesyareyproposedybyyguessing,ywithoutyguidanceyfromyexistingytheories.
B. Ityisypossibleytoystateythatyaytheoryyisytrue.
C. Hypothesesymustybeystatedyinyayformythatyassumesytheyyareytrue,yuntilyevidenceythatyisynoty
supportiveyrejectsythem.
D. Allytheoriesyareyfalseyuntilytheyyareyprovedytoybeytrue.
12. Whichyofytheyfollowingystatementsybestyexplainsytheyroleyofylogicyinyaytheoreticalyargument?
A. Asylongyasytheypremisesyofyanyargumentyfollowylogicallyyfromyoneytoytheyother,ytheyconclusioy
willybeycorrect.
B. Ayconclusionycanyonlyybeytrueytoytheyextentythatyweyacceptythatytheypremisesyonywhichyityisy
basedyareytrue.
C. Argumentsycannotybeyrejectedyonytheybasisyofyobservation;yonlyyonywhetherytheyyareylogicaly
not.
D. Allytheoriesyandytheiryargumentsymustycorrespondywithyactualyobservationyofycurrent
,ACCTy1080yFAT-Test-Bank
practices,yoryreal-worldyphenomena,ytoybeylogical.
13. Theyfailureyofyayparticularystudyytoysupportyaytheory:
A. Providesytheybasisyforyrejectingytheytheoryyasyuselessyoryinsignificant
B. Meansythatytheyparticularystudyymustyhaveyflawsyinyitsydesignyoryexecutionyinyspecifyingyandy
collectingytheydata
C. Threatensytheytheory,yifyrepeatedyorymoreyrefinedystudiesyfailytoysupportyitywithyempiricaly
evidence
D. Meansythatytheyhypothesisywasytooybroad,yandydidynotyspecifyytheyparticularycircumstancesyany
conditionsyinyenoughydetail
14. Whichyofytheyfollowingystatementsyisycorrectyaboutygeneralisingytheyfindingsyofyaystudyytoythey
generalypopulation,ybasedyonyparticularysamples?
A. Ityisynotypossibleytoymakeygeneralisationsyunlessyyouystudyytheyentireypopulation.
B. Ityisypossibleytoymakeygeneralisationsyasylongyasytheysampleyisyrepresentativeyofythey
population.
C. Ityisypossibleytoymakeygeneralisationsyasylongyasytheysampleyincludesyatyleasty50yperycentyofythey
population.
D. Ityisypossibleytoymakeygeneralisationsyifytheysampleyisyrepresentative,yandyitsysizeyallowsy
statisticalyinferencesytoybeymade.
15. Inyevaluatingyvariousyresearchystudies,yityisyimportantytoyfirstyconsider:
A. Theylogicyofytheyargumentyandyhowyityisytested
B. Theylogicyofytheyargumentyandytheyassumptionsyonywhichyityisybased
C. Theypurposeyofytheystudyyandytheytypeyofytheoryyonywhichyityisybased
D. Whetherytheydataycollectedyrepresentsyayvalidymeasureyofytheytheoreticalyvariablesyinyquestio
16. Theoriesyandymodelsyinytheysocialysciencesydifferyfromytheoriesyinytheypureysciencesybecause:
A. Theoriesyaboutyhumanybehaviourycannotybeyexpectedytoyapplyyallytheytime,ylikeysomeynaturaly
scienceytheories.
B. Aynumberyofytheoriesymayybeyavailableytoydescribe,yoryprovideyaydifferentyperspectiveyon,yay
particularyphenomenon.
C. Notyallytheoriesyinysocialyscienceyhaveypredictionsythatycanybeytested.
D. Allyofytheygivenyoptionsyareycorrect.
17. Theysequentialystagesyofyinductiveyreasoningyare:
A. Principles,yobjectives,yassumptionsyandypractice
B. Practice,yprinciples,yassumptionsyandyobjectives
C. Objectives,yassumptions,yprinciplesyandydefinitions
D. Assumptions,yobjectives,yprinciplesyandydefinitions
18. Whichyofytheyfollowingytermsydescribesyayrelationshipythatyisyarguedyfromytheyspecificy(ory
particular)ytoytheygeneral?
, ACCTy1080yFAT-Test-Bank
A. Scientificyreasoning
B. Inductiveyreasoning
C. Deductiveyreasoning
D. Logicalyreasoning
19. Whichyofytheyfollowingyisyanyexampleyofyaydominantyparadigmyinyaccountingypriorytoy1960?
A. Currentycostyaccounting
B. Conceptualyframeworkyofyaccounting
C. Historicalycostyaccounting
D. Continuouslyycontemporaryyaccounting
20. Whatyisyaydeductiveytheoryyoryargumentyjudgedyby?
A. Logicyandyassumptions
B. Observableyreal-worldyphenomena
C. Empiricalyevidenceyofyrelevantydataytoytestytheytheory
D. Allyofytheygivenyoptionsyareycorrect.
21. Anyinductiveytheoryyoryargument:
A. Reliesyonyobservationyofyreal-worldyphenomena
B. Establishesyitsytruthyoryfalsityybyycollectingyobjectiveyempiricalyevidence
C. Arguesyfromytheyspecificytoyformygeneralisations
D. Allyofytheygivenyoptionsyareycorrect.
22. Whichyofytheyfollowingyisynotyaydescriptionyofyayparadigm?
A. Ityisyaymodelyforytheyformulationyandyresolutionyofyresearchyproblems.
B. Ityisyayschoolyofythoughtyoryayprincipleybyywhichyaygroupyofyresearchersyoperate.
C. Ityisyaycollectionyofyunrelatedytheories.
D. Ityoffersyaysystematicyapproachytoyraiseyquestionsyandytoyframeyanswers.
23. Theysequentialystagesyofydeductiveyreasoningyare:
A. Principles,yobjectives,yassumptionsyandypractice
B. Practice,yprinciples,yassumptionsyandyobjectives
C. Objectives,yassumptions,yprinciplesyandydefinitions
D. Assumptions,yobjectives,yprinciplesyandydefinitions
24. Allyliabilityyaccountsyhaveycreditybalances.yTheyaccountsyreceivableyaccountyisyayliabilityyacco
unt.yTherefore,ytheyaccountsyreceivableyaccountyhasyaycreditybalance.yWhichyofytheyfollowingystat
ementsyisycorrectywithyrespectytoytheyaboveyargument?
A. Theyargumentyfollowsyaylogicalyandyclearyreasoning.
B. Theyargumentyisyillogical.
C. Theyconclusionyreachedyisyclearlyytrue.
D. Theyclassificationyofyaccountsyreceivableyisyconsistentywithytheyobservedyclassificationyofy
receivables.
