Intermediate Accounting Exam 1 Study Guide with Complete Solutions!

GAAP (Generally Accepted Accounting Principles) - ANSWER-A common set of accounting standards and procedures are called IRFS includes both International Reporting Standards and International Accounting Standards - ANSWER-TRUE International Financial Reporting Standards preceded International Accounting Standards - ANSWER-TRUE The standard-setting structure used by the International Accounting Standards Board is very similar to that used by the Financial Accounting Standards Board. - ANSWER-TRUE The rules-based standards of IFRS are more detailed than the simpler, principles-based standards of GAAP - ANSWER-FALSE Accounting principles are "generally accepted" only when I. an authoritative accounting rule-making body has established it in an official pronouncement II. a given practice has been accepted as appropriate because of its universal application. - ANSWER-1 AND 2 The role of the Securities and Exchange Commission (SEC) in the formulation of accounting standards can be best described as - ANSWER-VARIED - the SEC relies on the FASB to develop standards but gives advice and recommendations to the private sector Which of the following was established by the federal government to help develop and standardize financial information presented to stockholders? - ANSWER-Securities and Exchange Commission (SEC) The first step taken in the establishment of a typical FASB statement is - ANSWER-topics are identified and placed on the board's agenda Financial Accounting Concepts are a major type of pronouncement issued by the FASB (Financial Accounting Standards Board) - ANSWER-TRUE Which of the following is NOT considered a GAAP document? - ANSWER-Statement of Financial Accounting Concepts Financial Accounting Standards Board Accounting Standards Codification - ANSWER-1. does not create a new GAAP 2. simplifies user access to all authoritative US generally accepted accounting principles 3. eliminates nonessential information The European Union requires publicly traded member country companies to use IFRS - ANSWER-TRUE International Financial Reporting Standards (IFRS) are issued by - ANSWER-IASB (International Accounting Standards Board)