Question 1

Assessment measures are not concerned with particular attributes of objects.

Accepted Answer

Assessment measures are concerned with particular attributes of objects, typically related to their characteristics, performance, or quality.

Question 2

When a direct assessment measure is used, there is always only one correct measure.

Accepted Answer

Direct assessment measures can vary and include multiple methods such as exams, portfolios, or performance tasks, depending on the learning outcomes being assessed.

Question 3

Accounting theory includes conceptual frameworks, accounting legislation, valuation models, and hypotheses and theories.

Accepted Answer

Accounting theory encompasses all of these components and seeks to provide a basis for understanding accounting practices and principles.

Question 4

Using ratio scale, measurement is possible in accounting.

Accepted Answer

Ratio scale measurement is possible in accounting as it involves numerical values and a meaningful zero point, allowing for meaningful comparisons and calculations such as ratios, percentages, and growth rates.

Question 5

Replacement cost as a measure of asset value is generally more reliable than historical cost.

Accepted Answer

Replacement cost can fluctuate due to market conditions and may not reflect the actual amount paid for an asset, whereas historical cost is based on the actual transaction value, providing a more reliable and verifiable measure of asset value.

Question 6

Timeliness and cost are pertinent to assessment measures but are not pertinent to prediction measures.

Accepted Answer

Timeliness and cost are pertinent to both assessment and prediction measures, as accuracy and efficiency are important in both contexts.

Question 7

Accounting theory is developed and refined by the process of accounting research.

Accepted Answer

Accounting theory is not static and constantly evolves through research, observation, and analysis. The findings of accounting research can lead to the development and refinement of existing theories or the creation of new ones. Therefore, accounting research plays a vital role in advancing accounting theory.

Question 8

In a ratio scale, the zero point implies "nothingness," or the absence of the quality being measured.

Accepted Answer

In a ratio scale, the zero point represents a true zero, meaning there is an absence of the quality being measured. This is not necessarily true for other types of scales, such as interval or ordinal scales.

Question 9

Prediction measures are concerned with factors that may be indicative of future conditions.

Accepted Answer

Prediction measures are designed to identify potential future conditions by analyzing current and past data. These factors can help individuals and organizations make informed decisions and prepare for potential changes in the future.

Question 10

Numerals assigned in ordinal rankings indicate an order of preference where the degree of preference among ranks is the same.

Accepted Answer

Numerals assigned in ordinal rankings indicate an order of preference, but the degree of preference among ranks may not be the same. For example, in a race, the first place rank is often considered to be more preferred than the second place rank.

Question 11

A chart of accounts is an example of an ordinal classification.

Accepted Answer

A chart of accounts is an example of a nominal classification system, as it organizes financial transactions into named categories without implying a hierarchy or order among them.

Question 12

All accounting measurements are of either the assessment or the prediction variety.

Accepted Answer

All accounting measurements are either based on past events (assessment) or future expectations (prediction).

Question 13

Assessment measures are concerned with particular attributes of objects and are always direct measurements.

Accepted Answer

Assessment measures can be either direct or indirect, depending on the attribute being measured and the method used to measure it.

Question 14

The simplest type of measuring system is the nominal scale.

Accepted Answer

Nominal scale is a basic level of measurement that categorizes data into distinct categories without any particular order or ranking. This makes it the simplest type of measuring system.

Question 15

Accounting theory includes the basic rules, definitions, and principles that underlie the drafting of accounting standards and how they are derived.

Accepted Answer

Accounting theory is concerned with developing a logical framework for understanding accounting practices and principles. It includes the basic rules, definitions, and principles that underlie the drafting of accounting standards and how they are derived. Therefore, the statement is true.

Question 16

Indirect measures are usually preferable to direct measures because they are less costly to obtain.

Accepted Answer

Indirect measures may require additional steps or information to interpret and may also have lower validity and reliability compared to direct measures. Therefore, direct measures are usually considered more accurate and reliable, despite potentially being more costly to obtain.

Question 17

Hypotheses and theories are based on an informal method of investigation.

Accepted Answer

Hypotheses and theories are based on formal methods of investigation, including observation, experimentation, and analysis, to ensure they are grounded in empirical evidence and logical reasoning.

Question 18

The need for information on a timely basis may conflict with cost constraints in some situations.

Accepted Answer

Timely information may require expedited processes or resources that could increase costs, creating a conflict between the need for information and cost constraints.

Question 19

Objectivity may be defined as the degree of consensus among measurers.

Accepted Answer

Objectivity refers to the degree of consensus among different measurers, which means that their measurements and observations are consistent and not influenced by personal biases or beliefs. Therefore, the more agreement there is among measurers, the higher the objectivity of the measures.

Question 20

Financial accounting refers to accounting information that is used by management for decision-making purposes.

Accepted Answer

Financial accounting refers to accounting information that is used by external users such as shareholders, creditors, and regulators to assess the financial health of an organization. Management accounting, on the other hand, provides information to management for decision-making purposes.

Quiz 1: An Introduction to Accounting Theory