F1 Conceptual Framework and Financial Reporting

Question 1

Under the completed contract method, losses are recognized in full in the year of discovery. True or False

Answer 1

True.

Question 2

The objective of general purpose financial reporting is to:

Answer 2

Provide financial information that is useful to primary users.

Question 3

In % of completion method, the income is recognized in prior years. True or False?

Answer 3

True

Question 4

Interim financials enhance the QUALITATIVE characteristic. Why.

Answer 4

Interim financials emphasize timeliness by giving a snapshot of financial performance and estimates before year end.

Question 5

Name 4 qualitative characteristics of enhancing the usefulness of information that is relevant and faithfully represented.

Answer 5

1.Comparability
2.Verifiability
3.Timeliness
4.Understandability

Question 6

Discontinued operations: should not exclude operating losses from the date the company decided to dispose of segment to the end of year. True? False?

Answer 6

True

Question 7

When would a sale have a commercial substance?

Answer 7

When a significant change in cash flows related to the asset happens.

Question 8

1.General Fund
2. Special Revenue Funds
3. Debt Service Funds
4. Capital Projects funds
5. Permanent Funds
Are all part of what type of fund?

Answer 8

Governmental Funds

Question 9

What are the 2 types of proprietary funds?

Answer 9

1. Enterprise Funds
2. Internal Service Funds

Question 10

What are the 4 types of Fiduciary Funds?

Answer 10

1. Pension trust funds
2. Investment trust funds
3. Private purpose funds
4. Custodia (agency) funds

Question 11

Completed contract method recognizes revenue when the project is completed. True or false?

Answer 11

True