TRUE/FALSE QUESTIONS
1. Financial accounting refers to accounting information that is used by management for
decision-making purposes.
ANSWER: False
2. Accounting theory includes the basic rules, definitions, and principles that underlie the
drafting of accounting standards and how they are derived.
ANSWER: True
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation
models, and hypotheses and theories.
ANSWER: True
4. Hypotheses and theories are based on an informal method of investigation.
ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
ANSWER: False
6. Accounting theory is developed and refined by the process of accounting research.
ANSWER: True
7. Indirect measures are usually preferable to direct measures because they are less costly to
obtain.
ANSWER: False
, 8. Assessment measures are concerned with particular attributes of objects and are always
direct measurements.
ANSWER: False
9. When a direct assessment measure is used, there is always only one correct measure.
ANSWER: False
10. The simplest type of measuring system is the nominal scale.
ANSWER: True
11. A chart of accounts is an example of an ordinal classification.
ANSWER: False
,12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of
preference among ranks is the same.
ANSWER: False
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being
measured.
ANSWER: True
14. Using ratio scale measurement is possible in accounting.
ANSWER: True
15. Objectivity may be defined as the degree of consensus among measurers.
ANSWER: True
16. Assessment measures are not concerned with particular attributes of objects.
ANSWER: False
17. Prediction measures are concerned with factors that may be indicative of future conditions.
ANSWER: True
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to
prediction measures.
ANSWER: False
19. All accounting measurements are of either the assessment or the prediction variety.
, ANSWER: True
20. The need for information on a timely basis may conflict with cost constraints in some
situations.
ANSWER: True
21. The terms calculation and measurement both refer to the valuation of a real phenomena or
attribute.
ANSWER: False
22. Calculations attempt to simulate or come as close as possible to the measurement of real
phenomena or attributes.
ANSWER: False
1. Financial accounting refers to accounting information that is used by management for
decision-making purposes.
ANSWER: False
2. Accounting theory includes the basic rules, definitions, and principles that underlie the
drafting of accounting standards and how they are derived.
ANSWER: True
3. Accounting theory includes conceptual frameworks, accounting legislation, valuation
models, and hypotheses and theories.
ANSWER: True
4. Hypotheses and theories are based on an informal method of investigation.
ANSWER: False
5. Replacement cost as a measure of asset value is generally more reliable than historical cost.
ANSWER: False
6. Accounting theory is developed and refined by the process of accounting research.
ANSWER: True
7. Indirect measures are usually preferable to direct measures because they are less costly to
obtain.
ANSWER: False
, 8. Assessment measures are concerned with particular attributes of objects and are always
direct measurements.
ANSWER: False
9. When a direct assessment measure is used, there is always only one correct measure.
ANSWER: False
10. The simplest type of measuring system is the nominal scale.
ANSWER: True
11. A chart of accounts is an example of an ordinal classification.
ANSWER: False
,12. Numerals assigned in ordinal rankings indicate an order of preference where the degree of
preference among ranks is the same.
ANSWER: False
13. In a ratio scale, the zero point implies "nothingness," or the absence of the quality being
measured.
ANSWER: True
14. Using ratio scale measurement is possible in accounting.
ANSWER: True
15. Objectivity may be defined as the degree of consensus among measurers.
ANSWER: True
16. Assessment measures are not concerned with particular attributes of objects.
ANSWER: False
17. Prediction measures are concerned with factors that may be indicative of future conditions.
ANSWER: True
18. Timeliness and cost are pertinent to assessment measures but are not pertinent to
prediction measures.
ANSWER: False
19. All accounting measurements are of either the assessment or the prediction variety.
, ANSWER: True
20. The need for information on a timely basis may conflict with cost constraints in some
situations.
ANSWER: True
21. The terms calculation and measurement both refer to the valuation of a real phenomena or
attribute.
ANSWER: False
22. Calculations attempt to simulate or come as close as possible to the measurement of real
phenomena or attributes.
ANSWER: False
