Free T7 Exam Braindumps (page: 2)

Page 2 of 23

What is a constructive obligation?

  1. When a company recognizes the expected cost of profit-sharing and bonus payments
  2. When a company has no realistic alternative but to make payments
  3. When a change in the company’s informal practices would cause unacceptable damage to its relationship with employees
  4. The required accounting entry for liabilities or accrued expenses or cash paid

Answer(s): C



What are the usual and customary costs that a company incurs to support its main business called?

  1. Operating expenses
  2. Current liabilities
  3. Current debt
  4. Total expenses

Answer(s): A



Which of the following are ingredients of the fundamental qualitative characteristics of faithful representation?

  1. Complete, neutral, freedom from error
  2. Assets, liabilities, equity
  3. Predictive value, confirmatory value, relevance
  4. Comparability, verifiability, timeliness

Answer(s): A



When the economic consequences of a standard or rule is ignored, which characteristic is being represented?

  1. Neutral
  2. Verifiability
  3. Complete
  4. Relevance

Answer(s): A



Page 2 of 23



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