question

General-purpose financial statements are the product of

answer

financial accounting

question

Which of the following is not a user of financial reports?

answer

All of these are users

question

The financial statements most frequently provided include all of the following except the

answer

statement of retained earnings

question

The information provided by financial reporting pertains to

answer

individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers

question

All the following are differences between financial and managerial accounting in how accounting information is used except to

answer

All the answer choices are correct

question

Which of the following represents a form of communication through financial reporting but not through financial statements?

answer

President's 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

Which of the following helps in determining whether a business thrives?

answer

All of these answer choices are correct

question

Which of the following is related to an effective capital allocation?

answer

All of these answer choices are correct

question

Financial statements in the early 2000s provide information related to

answer

hard assets (inventory and plant assets)

question

Which of the following is not a major challenge facing the accounting profession?

answer

Accounting for hard 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

Primary users for general-purpose financial statements include

answer

both creditors and investors

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

Accrual accounting is used because

answer

it provides a better indication of a company's ability to generate cash flows than the cash basis

question

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

answer

An entity perspective

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 and it has been accepted because of its universal application

question

A common set of accounting standards and procedures are 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 due process in the context of standard setting at the FASB?

answer

All of the answer choices are correct

question

Which of the following organizations has been responsible for setting U.S. accounting standards?

answer

All of the answer choices are correct

question

Why did the AICPA create the Accounting Principles Board?

answer

The previous standard setting organization did not provide a structured set of accounting principles

question

Which organization was responsible for issuing Accounting Research Bulletins?

answer

The Committee on Accounting Procedure

question

A characteristic of generally accepted accounting principles include:

answer

a common set of standards and principles

question

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

Due process

question

The passage of a new FASB Accounting Standards Update requires the support of

answer

four Board members

question

What is the purpose of Emerging Issues Task Force?

answer

Provide a consensus on how to account for new and unusual financial transactions

question

Which organization is responsible for issuing Emerging Issues Task Force Statements?

answer

The FASB

question

The role of the Securities and Exchange Commission in the formulation of accounting principles can be best described as

answer

sometimes primary and sometimes secondary

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

The Financial Accounting Standards Board (FASB) was proposed by the

answer

Study Group on establishment of Accounting Principles (Wheat Committee

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

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

question

The major distinction between the Financial Accounting Standards Board (FASB) and its predecessor, the Accounting Principles Board (APB), is

answer

all members of the FASB are fully remunerated, serve full time, and are independent of any companies or institutions

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

Which of the following is not a publication of the FASB?

answer

Accounting Research Bulletins

question

FASB Technical Bulletins

answer

are not expected to have a significant impact on financial reporting in general and provide guidance when it does not conflict with any broad fundamental accounting principle

question

The purpose of the Emerging Issues Task Force is to

answer

issue statements which reflect a consensus on how to account for new and unusual financial transactions that need to be resolved quickly

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 pronouncements were issued by the Accounting Principles Board?

answer

APB Opinions

question

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

answer

IASB

question

Which of the following organizations has not published accounting standards?

answer

All of these have published accounting standards

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

The following are part of the "due process" system used by the FASB in the evolution of a typical FASB Accounting Standards Update: 1. Exposure Draft 2. FASB Accounting Standards Update 3. Preliminary Views

answer

3, 1, 2

question

Which of the following is true of generally accepted accounting principles?

answer

All of these answer choices are correct

question

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

answer

FASB

question

Which of the following is not a part of generally accepted accounting principles?

answer

All of these are part of generally accepted accounting principles

question

Which of the following publications does not qualify as a statement of generally accepted accounting principles?

answer

Accounting research studies issued by the AICPA

question

Rule 203 of the Code of Professional Conduct addresses:

answer

financial statements being based on generally accepted accounting principles

question

What is the purpose of a FASB Staff Position?

answer

Provide interpretive guidance.

question

Which of the following is not considered a component of generally accepted accounting principles?

answer

Articles published in CPA journals.

question

Financial accounting standard-setting in the United States

answer

can be described as a social process which reflects political actions of various interested user groups as well as a product of research and logic.

question

The purpose of the International Accounting Standards Board is to

answer

promote uniform accounting standards among countries of the world.

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.

question

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.

question

What is the "expectations gap"?

answer

The difference between what the public thinks the accountant should do and what the accountant thinks they can do.

question

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

answer

Language.

question

What would be an advantage of having all countries adopt and follow the same accounting standards?

answer

Comparability and lower preparation costs.

question

Which of the following is an ethical concern of accountants?

answer

Earnings manipulation.

Acct 311 Quiz 1 – Chapter 1 – Multiple Choice – Flashcards

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