C252 ACCT 6301 Accounting Research & Critical Thinking Objective Assessment Guid e Q & A 2024 1. Multiple Choice: Which of the following is a qualitative characteristic of useful financial information according to the IFRS Framework? a) Comparability b) Verifiability c) Timeliness d) All of the above Answer : d) All of the above Rationale: The IFRS Framework identifies comparability, verifiability, and timel iness as qualitative characteristics that make financial information useful. 2. True/False: The going concern principle assumes that a business will continue to operate indefinitely. Answer : True Rationale: The going concern principle is an accounti ng assumption that a company will continue its operations in the foreseeable future. 3. Fill -in-the-Blank: The __________ is the principle that requires revenue to be recognized at the time it is earned, regardless of when the payment is received. Answ er: Revenue Recognition Principle Rationale: The Revenue Recognition Principle dictates that revenue should be recognized when it is earned and realizable, not necessarily when cash is received. 4. Multiple Choice: In cost accounting, which costing met hod assigns both fixed and variable costs to products? a) Absorption costing b) Variable costing c) Throughput costing d) Activity -based costing Answer : a) Absorption costing Rationale: Absorption costing includes all direct costs, variab le and fixed overheads in product cost, as opposed to variable costing which only includes variable costs. 5. True/False: In financial accounting, sunk costs are considered when calculating future business profitability. Answer : False Rationale: Sunk costs are past costs that have already been incurred and cannot be recovered. They are not considered in future business decisions. 6. Fill -in-the-Blank: The __________ method of accounting for inventory assumes that the most recently p urchased items are sold first. Answer : Last -In, First -Out (LIFO) Rationale: The LIFO method assumes that the last items placed in inventory are sold before the older inventory, which is opposite to the First -In, First -Out (FIFO) method.
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