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 bb bb bb




1) The financial reporting process generates three basic financial
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statements.Answer: FALSE
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Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

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


Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

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


Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

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


Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly
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tradedcompanies.
bb b


Answer: TRUE b b


Diff: bb2
Objective: bb1.1
bbIFRS/GAAP: b b GAAP


AACSB: b b Application bbof bbknowledge

6) The FASB gives the SEC authority to regulate accounting for publicly traded
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companies.Answer: FALSE
bb b bb


Diff: bb1
Objective: bb1.1
bbIFRS/GAAP: b b GAAP


1

,AACSB: b b Application bbof bbknowledge




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
b b


Diff: bb1
Objective: bb1.1
bbIFRS/GAAP: b b GAAP


AACSB: b b Application bbof bbknowledge

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


Diff: bb2
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

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
b b


Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

10) Financial information includes information that is not governed by rules set forth by the
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accountingstandard-setting bodies.
bb b bb


Answer: TRUE
b b


Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

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 reportingbb


B) accounting standard setting bb bb


C) financial statementbb


D) financial
accountingAnswer:
bb b


bbD
Diff: bb2
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge




3

, 12) Which element of financial accounting involves identifying the individuals who demand
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financialinformation?
bb b


A) financial information bb


B) economic entity bb


C) user groups
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D) legal, economic, political, and social
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environmentAnswer: C
bb b bb


Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

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


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


incomeAnswer: B
bb b bb


Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

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 bb bb bb


D) Securities and Exchange bb bb


CommissionAnswer: A
bb b bb


Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:


b b GAAP/IFRS


AACSB: b b Application bbof bbknowledge

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 bb bb


CommissionAnswer: B
bb b bb


Diff: bb1
Objective: bb1.1
bbIFRS/GAAP: b b GAAP


AACSB: b b Application bbof bbknowledge




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