Acf 5956 Advanced Financial Accounting
ACF5956 Advanced financial accounting
Immediate Feedback Assessment Task
Week 2
INSTRUCTIONS:
- 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.
- 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?
- The Conceptual Framework takes precedence over accounting standards.
- Principles-based accounting standards strongly rely on the Conceptual Framework.
- An example of principles-based accounting standards is the Conceptual Framework.
- 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?
- They supply broad guidelines that can be applied to many situations.
- They are complex.
- They allow accountants to use professional judgement.
- 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?
- Publicity
- Petition
- Bribery
- Commenting on exposure draft
Question 4 Answer = A
According to public interest theory, why are regulations introduced?
- Companies fail to self-regulate as the market is not free and perfect.
- To maximize regulators' wealth.
- Accounting information is a private good that triggers free rider issues.
- 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?
- Reduced opportunities for earnings management through judgements
- Reduced complexity of standards
- Can cover most situations
- 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