question

True or False? Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan evaluate and control a company's operations.

answer

True

question

True or False? Users of financial reports of a company use the information provided by these reports to make their capital allocation decisions.

answer

True

question

True or False? An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and gaining credit

answer

True

question

True or False? The objective of financial reporting is to report the plans made by a company to improve the productivity of its employees

answer

False

question

True or False? Users of financial accounting statements have both coinciding and conflicting needs for information of various types

answer

True

question

True or False? Statements of Financial Accounting Concepts set fourth fundamental objectives and concepts that are used by the FASB in developing future standards of financial accounting and reporting.

answer

True

question

True or False? The FASB Codification creates a new set of GAAP

answer

False

question

True or False? The AICPA's Code of professional conduct requires that members prepare financial statements in accordance with the GAAP

answer

True

question

General-purpose financial statements are a product of...

answer

Financial Accounting

question

The information provided by financial reporting pertains to...

answer

Individual business enterprises, rather than to industrie,s or an economy as a whole, or to members of society as consumers

question

All the following are ways in which accounting information is used by Financial accounting except too...

answer

plan and control a company's operations

question

Which of the following represents a form of communication through financial reporting but NOT through Financial Statements

answer

Presidents Letter

question

The process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organization's operations is called...

answer

Managerial Accounting

question

How does accounting help the capital allocation process attract investment capital?

answer

By providing timely, relevant information.`

question

Financial statements in the early 2000s provide information related to

answer

hard assets (inventory and plant assets)

question

What is the objective of financial reporting?

answer

Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors.

question

Which of the following will be of interest to investors in decision-making?

answer

Both assessing the company's ability to generate net cash inflows and assessing management's ability to protect and enhance the capital provider's investments.

question

Which perspective is adopted as a part of the objective of general-purpose financial reporting?

answer

An entity perspective

question

A common set of accounting standards and procedures is called

answer

generally accepted accounting principles.

question

Which of the following is a general limitation of "general purpose financial statements"?

answer

General purpose financial statements may not be the most informative for a specific enterprise.

question

What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United States?

answer

The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction.

question

What is not due process in the context of standard setting at the FASB?

answer

No public hearings are held on proposed accounting standards

question

A characteristic of generally accepted accounting principles includes:

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a common set of standards and principles.

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Characteristics of generally accepted accounting principles include all of the following except

answer

each principle is approved by the SEC.

question

Why was it believed that accounting standards that were issued by the Financial Accounting Standards Board would carry more weight?

answer

The FASB follows due process.

question

What is the purpose of Emerging Issues Task Force?

answer

Provide implementation guidance within the Codification framework to reduce diversity in practice on a timely basi

question

Each of the following are true of the Securities and Exchange Commission except that

answer

the FASB relies on the SEC to develop accounting standards.

question

The body that has the power to prescribe the accounting practices and standards to be employed by companies that fall under its jurisdiction is the

answer

SEC.

question

Companies that are listed on a stock exchange are required to submit their financial statements to the

answer

SEC.

question

Which of the following is true of the Financial Accounting Standards Board?

answer

The members of the FASB are appointed by the Financial Accounting Foundation.

question

The Financial Accounting Foundation

answer

oversees the operations of the FASB.

question

The Financial Accounting Standards Board employs a "due process" system which

answer

enables interested parties to express their views on issues under consideration.

question

The purpose of the Emerging Issues Task Force is to

answer

provide implementation guidance within the Codification framework to reduce diversity in practice on a timely basis.

question

The American Institute of Certified Public Accountants (AICPA) continues to be involved in all of the following except

answer

developing auditing standards for public companies.

question

Which of the following organizations has not been instrumental in the development of financial accounting standards in the United States?

answer

IASB

question

The purpose of Statements of Financial Accounting Concepts is to

answer

form a conceptual framework for solving existing and emerging problems.

question

Members of the Financial Accounting Standards Board are

answer

independent of any other organization.

question

Which of the following is not true of generally accepted accounting principles?

answer

GAAP does not have substantial authoritative support

question

The most significant current source of generally accepted accounting principles is the

answer

FASB.

question

Which of the following is a source of pressure that may influence the accounting standard setting process?

answer

All of these answers are correct -- Congress, Lobbyists, CPA Firms

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What is a possible danger if politics plays too big a role in accounting standard setting?

answer

Accounting standards that are not truly generally accepted.

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What is not a reason that accounting standards may differ across countries?

answer

Language

question

Which of the following is a requirement for an accounting principle to be called "generally accepted"?

answer

An authoritative accounting rule-making body has established it or it has been accepted because of its universal application.

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