Intermediate Accounting Ch. 1 (Kieso,
Weygandt, Warfield 16e) Questions And
Answers
Managerial Accounting - Correct Answer ✔✔ - The process of identifying, measuring, analyzing, and
communicating financial information needed by management to plan, control, and evaluate a company's operations.
Financial Accounting - Correct Answer ✔✔ - The process that culminates in the preparation of financial reports on
the enterprise for use by both internal and external parties. Users include investors, creditors, managers, unions, and
government entities.
Essential characteristics of accounting - Correct Answer ✔✔ - (1) The identification, measurement, and
communication of financial information about (2) economic entities to (3) interested parties.
Objective of financial reporting - Correct Answer ✔✔ - The objective of general-purpose financial reporting is to
provide financial information about the reporting entity that is useful to present and potential equity investors, lenders,
and other creditors in decisions about providing resources to the entity.
General-purpose financial statements provide: - Correct Answer ✔✔ - at the least cost the most useful information
possible.
Primary users of general-purpose financial statements: - Correct Answer ✔✔ - investors and creditors. *Primary
user groups are not management, regulators, or some other non-investor groups.
Entity perspective: - Correct Answer ✔✔ - companies are viewed as separate and distinct from their owners
(present shareholders).
investors are interested in: - Correct Answer ✔✔ - (1) the company's ability to generate net cash inflows and (2)
management's ability to protect and enhance the capital providers' investments.
Accrual-basis accounting: - Correct Answer ✔✔ - ensures that a company records events that change its financial
statements in the period in which the events occur, rather than only in the periods in which it receives or pays cash. A
company:
(1) Recognizes revenues when it provides the goods or services rather than when it receives cash.
(2) Recognizes expenses when it incurs them rather than when it pays them.
"Generally accepted" - Correct Answer ✔✔ - Means either that an authoritative accounting rule-making body has
established a principle of reporting in a given area or that over time a given practice has been accepted as
appropriate because of its universal application.
Three organizations that are instrumental in the development of financial accounting standards (GAAP) in the United
States: - Correct Answer ✔✔ - 1. SEC
2. AICPA
Weygandt, Warfield 16e) Questions And
Answers
Managerial Accounting - Correct Answer ✔✔ - The process of identifying, measuring, analyzing, and
communicating financial information needed by management to plan, control, and evaluate a company's operations.
Financial Accounting - Correct Answer ✔✔ - The process that culminates in the preparation of financial reports on
the enterprise for use by both internal and external parties. Users include investors, creditors, managers, unions, and
government entities.
Essential characteristics of accounting - Correct Answer ✔✔ - (1) The identification, measurement, and
communication of financial information about (2) economic entities to (3) interested parties.
Objective of financial reporting - Correct Answer ✔✔ - The objective of general-purpose financial reporting is to
provide financial information about the reporting entity that is useful to present and potential equity investors, lenders,
and other creditors in decisions about providing resources to the entity.
General-purpose financial statements provide: - Correct Answer ✔✔ - at the least cost the most useful information
possible.
Primary users of general-purpose financial statements: - Correct Answer ✔✔ - investors and creditors. *Primary
user groups are not management, regulators, or some other non-investor groups.
Entity perspective: - Correct Answer ✔✔ - companies are viewed as separate and distinct from their owners
(present shareholders).
investors are interested in: - Correct Answer ✔✔ - (1) the company's ability to generate net cash inflows and (2)
management's ability to protect and enhance the capital providers' investments.
Accrual-basis accounting: - Correct Answer ✔✔ - ensures that a company records events that change its financial
statements in the period in which the events occur, rather than only in the periods in which it receives or pays cash. A
company:
(1) Recognizes revenues when it provides the goods or services rather than when it receives cash.
(2) Recognizes expenses when it incurs them rather than when it pays them.
"Generally accepted" - Correct Answer ✔✔ - Means either that an authoritative accounting rule-making body has
established a principle of reporting in a given area or that over time a given practice has been accepted as
appropriate because of its universal application.
Three organizations that are instrumental in the development of financial accounting standards (GAAP) in the United
States: - Correct Answer ✔✔ - 1. SEC
2. AICPA
