Intermediate Accounting 3 Final Exam Practice Problems questions with correct answers.

Intermediate Accounting 3 Final Exam
Practice Problems questions with
correct answers.
Can U.S. companies listed on U.S. stock exchanges use IFRS? ANS - No. U.S. companies do not have the
option to report under IFRS.



How does a principles-based standard differ from a rules-based standard? ANS - A principles-based
standard is consistent with a theoretical framework. In contrast, a rules-based standard does not
necessarily rely on a consistent theoretical framework. Rather, it contains more specific and prescriptive
rules



The IASB is comprised of 14 members who are appointed by the

IFRS Foundation's board of trustees. At least ____ members serve full time, and not more than _____
can be part-time members. To ensure broad and diverse international representation, the IASB is
composed of: four members from the ____, four members from ____,

four members from _____, one member from ____, and one member appointed from any area, subject
to maintaining overall geographical balance. ANS - eleven, three, Asia/Oceania region, Europe, the
Americas, Africa



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Provides a clear discussion of the accounting objective related to the standard ANS
-P



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Contains detailed application guidance ANS - R



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Contains numerous exceptions to the types of firms and industries that are covered
ANS - R



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Involves no bright-line tests ANS - P

, Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Contains numerous bright-line tests ANS - R



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Involves a significant amount of interpretation in application ANS - P



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Involves few, if any, exceptions ANS - P



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Provides insufficient guidance to implement the standard ANS - P



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Would not rely on extensive use of professional judgment ANS - R



Identify whether the items below are characteristics of a principles-based (P) or rules-based (R)
accounting system: Results in inconsistencies between standards ANS - R



An accountant will use a ___________________________ accounting standard only if the length of a
contract covers substantially all of the useful life of a plant asset ANS - Principles-based standard



An accountant will use a ___________________________ accounting standard only if the number of
new common shares a firm issues is equal to 20% of the previously outstanding shares. ANS - Rules-
based standard



An accountant will use a ___________________________ accounting standard only if a corporation
owns over 50% of the voting shares of an affiliate company. ANS - Rules-based standard



An accountant will use a ___________________________ accounting standard only if a corporation has
the ability to control the operating and financial activities of an affiliate company. ANS - Principles-
based standard