practice quiz ch 1 acct
I. an authoritative accounting rule-making body has established it in an official pronouncement.
II. it has been accepted as appropriate because of its universal application
I or II.
Neither I nor II.
sometimes primary and sometimes secondary.
the board conducts research and analysis and a discussion memorandum is issued.
a public hearing on the proposed standard is held.
the board evaluates the research and public response and issues an exposure draft.
topics are identified and placed on the board’s agenda.
include detailed practices and procedures as well as broad guidelines of general application.
are influenced by pronouncements of the SEC and IRS.
change over time as the nature of the business environment changes.
all of these answer choices are correct.
1. Technical competence is not enough when encountering ethical decisions.
2. The pressures “to bend the rules,” “to play the game,” “to just ignore it” can be considerable.
3. Time, job, client, personal, and peer pressures do not complicate the process of ethical sensitivity and selection among alternatives.
4. The decision may be easier because there is no comprehensive ethical system to provide guidelines.
1, 2, 3, and 4 are all true.
1, 2, and 4 are all true.
2 and 4 are all true.
1 and 2 are all true.
Cash flow information.
provides an efficient market for buying and selling securities.
all of these choices are correct.
financial reporting should be focused an assessing the company’s stewardship.
financial reporting should be focused solely on the needs of the owners.
companies are viewed as separate and distinct from their owners.
none of these answer choices are correct.
It would be almost impossible to prepare statements that could be compared.
Each company would have to develop its own standards.
Readers of financial statements would have to familiarize themselves with every company’s peculiar accounting and reporting practices.
All of these answer choices are correct.
issue enforceable standards which regulate the financial accounting and reporting of multinational corporations.
develop a uniform currency in which the financial transactions of companies through-out the world would be measured.
develop a single set of high-quality and understandable IFRS for general-purpose financial statements.
arbitrate accounting disputes between auditors and international companies.
IFRS includes standards referred to as International Auditing Standards (IAS).
The adoption of IFRS by U.S. Companies would make it easier to compare them with foreign companies.
IFRS is more “principle-based than U.S. GAAP”.
IFRS are developed by the IASB.
Cash basis accounting.
Accrual basis accounting.
Managerial basis accounting.
Financial basis accounting.
Statements of financial standards issued by the FASB
Accounting interpretations issued by the FASB
Accounting research studies issued by the AICPA
Regulators (IRS and SEC).
Investors and creditors.
CPAs and accounting firms.
All of these choices are correct.
the goal of the Codification was to provide one place where all authoritative literature about financial statement preparation could be found.
the purpose of the Codification is to create new GAAP.
the Codification was created to simplify user access.
the Codification changes the way GAAP is documented, presented, and updated.
GAAP is the term used to indicate the whole body of FASB authoritative literature.
Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.
The primary governmental body that has influence over the FASB is the SEC.
The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.
2. it should operate in full view of the public through a “due process” system that gives interested people ample opportunities to make their view known
governmental auditing and accounting practices.
government audit and attest policies.
generally accepted accounting principles.
generally accepted attest principles.
Research, exposure draft, discussion paper, standard.
Research, preliminary views, discussion paper, standard.
Research, discussion paper, exposure draft, standard.
Discussion paper, research, exposure draft, standard.
FASB standards, interpretations, and concepts statements.
any accounting guidance included in the FASB Codification.
FASB standards, interpretations, EITF consensuses, and accounting rules issued by FASB predecessor organizations.
FASB financial standards.
It takes precedence over all other authoritative literature.
It is used when there is no standard or interpretation related to the reporting issues under consideration.
It is not as authoritative as a standard but takes precedence over any interpretation related to the reporting issue.
It has no authoritative status.
providing specific guidance related to specific needs.
providing information to individuals who are experts in the field.
reporting to capital providers.
reporting on stewardship.
accounting standards can have detrimental impacts on the wealth levels of the providers of financial information.
standard-setters must give first priority to ensuring that companies do not suffer any adverse effect as a result of a new standard.
standard-setters must ensure that no new costs are incurred when a new standard is issued.
the objective of financial reporting should be politically motivated to ensure acceptance by the general public.
what the users of financial statements want from the government and what is provided.
what financial information management provides and what users want.
what the public thinks accountants should do and what accountants think they can do.
what the governmental agencies want from standard-setting and what the standard-setters provide.
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