FAR - F1 MC Questions

Question 1

Which of the following characteristics enhances relevance and faithful representation?

a. Predictive Value
b. Timeliness
c. Materiality
d. Neutrality

Answer 1

b. Timeliness

Question 2

According to the FASB and IASB conceptual frameworks, to be relevant, information should have which of the following?

a. Predictive Value
b. Completeness
c. Verifiability
d. Neutrality

Answer 2

a. Predictive Value

Question 3

Interim financial reporting should be viewed primarily in which of the following ways?

a. As reporting for an integral part of an annual period.
b. As if the interim period were an annual accounting period.
c. As reporting under a comprehensive basis of accounting other than GAAP/IFRS.
d. As useful only if activity is spread evenly throughout the year.

Answer 3

a. As reporting for an integral part of an annual period.

Question 4

On December 31, Brooks Co. decided to end operations and dispose of its assets within three months. At December 31, the net realizable value of the equipment was below historical cost. What is the appropriate measurement basis for equipment included in Brooks’ December 31 balance sheet?

a. Net realizable value
b. Current reproduction cost
c. Historical cost
d. Current replacement cost

Answer 4

a. Net realizable value