TEST BANK - Intermediate Accounting, 3rd Edition by Elizabeth A. Gordon, Jana S. Raedy, All Chapters 1 - 22, Complete Newest Version

Test Bank for Intermediate Accounting, 3rd Edition by Elizabeth A.
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Gordon
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✅
Intermediate Accounting, 3e (Gordon/Raedy/Sannella)
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All Chapters
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Chapter 1 The Financial Reporting Environment
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1.1 Overview of Financial Reporting hh hh hh




1) The financial reporting process generates three basic financial
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statements.Answer: FALSE
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Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

2) The demand for financial information is based on market participant
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demand.Answer: TRUE
hh h hh


Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

3) Managers of economic entities are best considered to be users of financial
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information.Answer: FALSE
hh h hh


Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

4) Managers of economic entities are best considered to be preparers of financial
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information.Answer: TRUE
hh h hh


Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly
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tradedcompanies.
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Answer: TRUE h h


Diff: hh2
Objective: hh1.1
hhIFRS/GAAP: h h GAAP


AACSB: h h Application hhof hhknowledge

6) The FASB gives the SEC authority to regulate accounting for publicly traded
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companies.Answer: FALSE
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Diff: hh1
Objective: hh1.1
hhIFRS/GAAP: h h GAAP


1

,AACSB: h h Application hhof hhknowledge




2

,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting
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standards andoversees the audits of public companies in the United States.
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Answer: FALSE
h h


Diff: hh1
Objective: hh1.1
hhIFRS/GAAP: h h GAAP


AACSB: h h Application hhof hhknowledge

8) Financial accounting standards influence the behavior of managers and other
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internal users.Answer: TRUE
hh hh h hh


Diff: hh2
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

9) Theories and procedures that evolve as a result of lobbying from various groups are
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examples ofproactive factors within the legal, economic, political, and social environment.
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Answer: FALSE
h h


Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

10) Financial information includes information that is not governed by rules set forth by the
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accountingstandard-setting bodies.
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Answer: TRUE
h h


Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

11) What is the term that describes the process of identifying, measuring, and communicating
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financialinformation about an economic entity to various user groups?
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A) financial reportinghh


B) accounting standard setting
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C) financial statementhh


D) financial
accountingAnswer:
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hhD
Diff: hh2
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge




3

, 12) Which element of financial accounting involves identifying the individuals who demand
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financialinformation?
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A) financial information hh


B) economic entity hh


C) user groups
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D) legal, economic, political, and social
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environmentAnswer: C
hh h hh


Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

13) Which of the following is not one of the four basic financial statements?
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A) balance sheet hh


B) trial balance
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C) cash flows statement
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D) statement of comprehensive hh hh


incomeAnswer: B
hh h hh


Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

14) Which organization is responsible for promulgating U.S. GAAP?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) International Accounting Standards Board hh hh hh


D) Securities and Exchange hh hh


CommissionAnswer: A
hh h hh


Diff: hh1
Objective: hh hh hh1.1
hhIFRS/GAAP:


h h GAAP/IFRS


AACSB: h h Application hhof hhknowledge

15) Which organization is responsible for setting auditing standards and overseeing the audits
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of publiccompanies in the United States?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) American Institute of Certified Public Accountants
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D) Securities and Exchange hh hh


CommissionAnswer: B
hh h hh


Diff: hh1
Objective: hh1.1
hhIFRS/GAAP: h h GAAP


AACSB: h h Application hhof hhknowledge




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