Acf 5956 Advanced Financial Accounting

ACF5956 Advanced financial accounting

Immediate Feedback Assessment Task

Week 2

INSTRUCTIONS:

1. Record your responses to the following questions on the card provided. You should scratch the answer you think is correct.  If a star appears in the scratched box you have the correct answer.  You should continue on with further attempts until you see the star.
2. Please provide the name and student number for each member of your group on the sheet attached to your scratch card.

Allocation of Points:  The points awarded for each question reduces for each attempt.  Correct on the 1st try = 5 points; 2nd try = 2 points; 3rd try = 1 point; 4th try = 0 points.

Question 1                Answer = B

Which of the following statements regarding the Conceptual Framework and accounting standards is correct?

1. The Conceptual Framework takes precedence over accounting standards.
2. Principles-based accounting standards strongly rely on the Conceptual Framework.
3. An example of principles-based accounting standards is the Conceptual Framework.
4. C. Accounting standards are rules-based, whereas the Conceptual Framework is principles-based.

Question 2                Answer = D

Which of the following is a disadvantage for principles-based accounting standards?

1. They supply broad guidelines that can be applied to many situations.
2. They are complex.
3. They allow accountants to use professional judgement.
4. They allow managers to select accounting policies that may not reflect the substance of a transaction.

Question 3                Answer = C

Which of the following is not a method of lobbying?

1. Publicity
2. Petition
3. Bribery
4. Commenting on exposure draft

Question 4                Answer = A

According to public interest theory, why are regulations introduced?

1. Companies fail to self-regulate as the market is not free and perfect.
2. To maximize regulators' wealth.
3. Accounting information is a private good that triggers free rider issues.
4. Accounting information is a public good with optimal production of information.

Question 5                Answer = A

Which if the following is an advantage of rules-based accounting standards?

1. Reduced opportunities for earnings management through judgements
2. Reduced complexity of standards
3.         Can cover most situations
4.         Improve representational faithfulness of financial statements

Question 6                Answer = B

Which of the following is not a disadvantage of regulation?

A.        It can be difficult to reverse

B.        It leads to standardisation

C.        It can restrict communication