21.Which one of the following statements best describes the concept of conservatism?
a. Profits should be accelerated in all cases.
b. The measurement of an event is verifiable and reliable.
c.The value of goods and services provided is recognized when earned.
d.When uncertainty exists, understating assets, overstating liabilities, accelerating recognition of losses, and delaying recognition of gains is preferred.
22.The valuation basis used to measure accounts receivable is:
a. the original cost of the goods sold.
b. current input cost
c. net realizable value.
d. replacement cost.
23.The valuation basis used to measure equipment and other plant assets on the balance sheet is:
a. the dollar amount for which the assets can be sold.
b. the cash expected to be received in the future.
c.the original cost adjusted for depreciation.
d. the assets’ net realizable value.
24.Technically, the valuation basis used to measure shareholders' equity is:
a. original cost adjusted to net book value.
b. replacement value.
c. net realizable value.
d. None of these.
25.Which one of the following is violated when a department store records revenue for gift certificates sold to customers that are not expected to be redeemed until next year?
a. Matching
b. Revenue recognition criteria
c. Going concern
d. Expense versus revenue concept
26.Which one of the following is violated when a retail store records revenue for a bank credit card sale prior to receiving the money from the bank?
a. No violation occurred
b. Objectivity
c. Going concern
d. Revenue recognition criteria
27.Which one of the following is violated when a company recognizes revenue upon the receipt of cash from a customer who has paid in advance for services?
a. Expense policy
b. Objectivity
c. Matching
d. Revenue recognition criteria
28.Which one of the following is violated when a firm measures accounts receivable at its face amount even though knowing some customers may not pay the amounts due?
a. Consistency
b. Conservatism
c. Materiality
d. Revenue recognition criteria
29.Which of the following are exceptions to financial accounting measurement?
a. Consistency and conservatism
b. Objectivity and materiality
c. Going concern and materiality
d. Conservatism and materiality
30.Which one of the following is most likely violated if firm increases the dollar amount reported for unsold inventory on the balance sheet to a cost it anticipates it will have to pay for future inventory items?
a. Consistency
b. Conservatism
c. Going concern
d. Economic entity