1.

Proponents of historical cost ordinarily maintain that in comparison with all other valuation
alternatives for general purpose financial reporting, statements prepared using historical
costs are more:

Student Response Correct Answer

a reliable.
.

b. relevant.

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c. indicative of the entity's purchasing power.

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d. conservative.

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2. Financial accounting standard-setting in the United States:

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ar stu

Student Response Correct Answer

is

a can be described as a social process which reflects political actions

. of various interested user groups as well as a product of research
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and logic.

b. is based solely on research and empirical findings.

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c. is a legalistic process based on rules promulgated by governmental

agencies.

d. is democratic in the sense that a majority of accountants must

agree with a standard before it becomes enforceable.

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