The Conceptual Framework for Financial Reporting ( QUIZ 001 )

1. All the concepts, principles, conventions, laws, rules and regulations that are
used to prepare and present financial statements are known as Generally
Accepted Accounting Principles or GAAP.

• True
• False
• True under certain conditions
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2. GAAP means

• Generally accepted accounting principles
• Generally accepted accounting practices
• Generally accredited accounting principles
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3. A conceptual framework is a system of concepts and principles that underpin the
preparation of financial statements.

• True
• False
• False under certain conditions
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4. The new conceptual framework is being developed on a

• Sections basis
• Chapter by chapter basis
• Issues raised basis
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5. The name of Chapter 1 of the conceptual framework for financial reporting

• Qualitative characteristics of financial information.
• The objective of general purpose financial statements.
• The reporting entity
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6. Disadvantage of not having a formal framework

• Standards are inconsistent with each other or with legislation
• Accounting standards fail to address important issues
• All of above
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7. The International Accounting Standards Committee (the predecessor of the IASB) issued a
conceptual framework document called the Framework for the Preparation and Presentation of Financial Statements in

• 1989
• 1992
• 1987
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8. The one of the purpose of Conceptual Framework is:

• To assist the IASB in the development of future IFRSs and in its review of existing IFRSs
• To assist the IASB in promoting harmonization of regulations, accounting standards and procedures relating to the presentation of financial statements by providing a basis for reducing the number of alternative accounting treatments permitted by IFRSs
• All Above
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9. In cases where a conflict between IFRS and Conceptual frame work arise

• Requirements of the IFRS will prevail over those of the Conceptual Framework
• Requirements of the Conceptual Framework will prevail over those of the IFRS
• Requirements of the local laws will prevail over those of the Conceptual Framework & IFRS
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10. Going concern assumption is particularly relevant for

• Net realizable value
• Financial Instruments
• The valuation of assets
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