Financial Reporting And Analysis - Financial Reporting And Analysis Section 1

Avatto>>CFA Level 1>>PRACTICE QUESTIONS>>Financial Reporting And Analysis>>Financial Reporting And Analysis Section 1

1. Which of the following is least likely to be filed with the Securities and Exchange Commission?

  • Option : A
  • Explanation : The projected income statements are not filed with the Securities and Exchange Commission. However, The SEC does require companies to submit audited financial statements and an assessment of the risk involved in the business.
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3. The goal of establishing one set of universally accepted financial reporting standards can be best described as resulting in:

  • Option : A
  • Explanation : The standards seem to be converging so as to result in a universally accepted set of standards. This is called convergence of standards.
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4. According to the IASB Conceptual Framework, the qualitative characteristic that different knowledgeable users agree on the information presented to be a faithful representation of the economic events is best described as:

  • Option : C
  • Explanation : Under the International Accounting Standards Board‟s Conceptual Framework, verifiability is the qualitative characteristic that means that different knowledgeable and independent users would agree that the information presented faithfully represents the economic events that it is intended to represent
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5. According to the IFRS Conceptual Framework, the least likely feature underlying the preparation of financial statements is:

  • Option : B
  • Explanation : The IFRS Conceptual Framework specifies a number of general features underlying the preparation of financial statements, including materiality and accrual basis. Matching is not one of those general features; it is a general principle of expense recognition.
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