Test Bank for For Intermediate Accounting 3rd Edition by Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella| Complete Guide A+.

Test Bank for Intermediate Accounting, 3rd Edition by Elizabeth A. Gordon
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Intermediate Accounting, 3e (Gordon/Raedy/Sannella) ji ji ji

All Chapters
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Chapter 1 The Financial Reporting Environment
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1.1 Overview of Financial Reporting ji ji ji




1) The financial reporting process generates three basic financial statements.
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Answer: FALSE
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Diff: 1 ji


Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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2) The demand for financial information is based on market participant demand.
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Answer: TRUE
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Diff: 1 ji


Objective: 1.1 j i



IFRS/GAAP:
ji



j GAAP/IFRS
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AACSB: Application of knowledge
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3) Managers of economic entities are best considered to be users of financial information.
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Answer: FALSE
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Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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4) Managers of economic entities are best considered to be preparers of financial information.
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Answer: TRUE
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Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly traded
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companies.
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Answer: TRUE j i j i



Diff: 2 ji



Objective: 1.1 j i



IFRS/GAAP:
ji GAAP j i



AACSB: Application of knowledge
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6) The FASB gives the SEC authority to regulate accounting for publicly traded companies.
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Answer: FALSE
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Diff: 1 ji


Objective: 1.1 j i



IFRS/GAAP:
ji GAAP j i



AACSB: Application of knowledge
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1

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



Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
ji GAAP j i



AACSB: Application of knowledge
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8) Financial accounting standards influence the behavior of managers and other internal users.
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Answer: TRUE
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Diff: 2 ji



Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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9) Theories and procedures that evolve as a result of lobbying from various groups are examples of
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proactive factors within the legal, economic, political, and social environment.
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Answer: FALSE j i j i



Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
ji



j GAAP/IFRS
i



AACSB: Application of knowledge
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10) Financial information includes information that is not governed by rules set forth by the accounting
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standard-setting bodies.
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Answer: TRUE j i j i



Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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11) What is the term that describes the process of identifying, measuring, and communicating financial
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information about an economic entity to various user groups?
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A) financial reporting ji



B) accounting standard setting ji ji



C) financial statement ji



D) financial accounting ji



Answer: D
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Diff: 2 ji



Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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2

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



B) economic entity ji



C) user groups ji



D) legal, economic, political, and social environment
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Answer: C
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Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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13) Which of the following is not one of the four basic financial statements?
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A) balance sheet ji



B) trial balance
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C) cash flows statement
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D) statement of comprehensive income ji ji ji



Answer: B
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Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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14) Which organization is responsible for promulgating U.S. GAAP?
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A) Financial Accounting Standards Board ji ji ji



B) Public Company Accounting Oversight Board
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C) International Accounting Standards Board ji ji ji



D) Securities and Exchange Commission ji ji ji



Answer: A
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Diff: 1 ji


Objective: 1.1 j i



IFRS/GAAP:
ji



j GAAP/IFRS
i



AACSB: Application of knowledge
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15) Which organization is responsible for setting auditing standards and overseeing the audits of public
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companies in the United States?
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A) Financial Accounting Standards Board ji ji ji



B) Public Company Accounting Oversight Board
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C) American Institute of Certified Public Accountants ji ji ji ji ji



D) Securities and Exchange Commission ji ji ji



Answer: B
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Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
ji GAAP j i



AACSB: Application of knowledge
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3

, 16) Which organization prepares and grades the Uniform CPA Examination?
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A) Financial Accounting Standards Board ji ji ji



B) Public Company Accounting Oversight Board
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C) American Institute of Certified Public Accountants ji ji ji ji ji



D) International Accounting Standards Board ji ji ji



Answer: C
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Diff: 1 ji


Objective: 1.1 j i



IFRS/GAAP:
ji GAAP j i



AACSB: Application of knowledge
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17) Which of the following user groups consists of individuals that provide guidance to others in
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making investment and credit decisions?
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A) financial analysts ji



B) equity investors ji



C) creditors
D) suppliers
Answer: A
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Diff: 2
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Objective: 1.1 ji



j IFRS/GAAP:
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GAAP/IFRS
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AACSB: Application of knowledge
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18) Which of the following user groups consists of individuals who expect to receive a return on their
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investment?
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A) employees
B) equity investors ji



C) creditors
D) suppliers and customers ji ji



Answer: B
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Diff: 1 ji


Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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19) Which of the following user groups consist of companies that analyze financial information to identify
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the reporting entity's objectives, assumptions, overall business strategy, and capabilities?
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A) competitors
B) creditors and other debt investors ji ji ji ji



C) employees and labor unions ji ji ji



D) suppliers and customers ji ji



Answer: A
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Diff: 1 ji



Objective: 1.1 j i



IFRS/GAAP:
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j GAAP/IFRS
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AACSB: Application of knowledge
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