TEST BANK Intermediate Accounting, 3rd Edition by Elizabeth A. GordonVerified Chapters 1 - 22

TEST BANK
Intermediate Accounting, 3rd Edition by Elizabeth A.
Gordon




1

,Chapter`1 The`Financial`Reporting`Environment All`Chapters

1.1 Overview`of`Financial`Reporting

1) The`financial`reporting`process`generates`three`basic`financial`statements.
`Answer:` FALSE
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

2) The`demand`for`financial`information`is`based`on`market`participant`demand.
`Answer:` TRUE
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

3) Managers`of`economic`entities`are`best`considered`to`be`users`of`financial`information.
`Answer:` FALSE
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

4) Managers`of`economic`entities`are`best`considered`to`be`preparers`of`financial`information.
`Answer:` TRUE
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

5) The`Securities`and`Exchange`Commission`(SEC)`regulates`financial`reporting`for`publicly`traded
`companies.
Answer:` ` TRUE
Diff:`2
Objective:` 1.1`IFRS/GAA
P:` GAAP
AACSB:` ` Application`of`knowledge

6) The`FASB`gives`the`SEC`authority`to`regulate`accounting`for`publicly`traded`companies.
`Answer:` FALSE
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP
AACSB:` ` Application`of`knowledge




2

,7) The`Public`Company`Accounting`Oversight`Board`(PCAOB)`sets`financial`accounting`standards`and
`oversees`the`audits`of`public`companies`in`the`United`States.
Answer:` ` FALSE
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP
AACSB:` ` Application`of`knowledge

8) Financial`accounting`standards`influence`the`behavior`of`managers`and`other`internal`users.
`Answer:` TRUE
Diff:`2
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

9) Theories`and`procedures`that`evolve`as`a`result`of`lobbying`from`various`groups`are`examples`o
f`proactive`factors`within`the`legal,`economic,`political,`and`social`environment.
Answer:` ` FALSE
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

10) Financial`information`includes`information`that`is`not`governed`by`rules`set`forth`by`the`accountin
g`standard-setting`bodies.
Answer:` ` TRUE
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

11) What`is`the`term`that`describes`the`process`of`identifying,`measuring,`and`communicating`financial
`information`about`an`economic`entity`to`various`user`groups?
A) financial`reporting
B) accounting`standard`setting
C) financial`statement
D) financial`accounting
`Answer:` D
Diff:`2
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge




3

, 12) Which`element`of`financial`accounting`involves`identifying`the`individuals`who`demand`financial
`information?
A) financial`information
B) economic`entity
C) user`groups
D) legal,`economic,`political,`and`social`environment
`Answer:` C
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

13) Which`of`the`following`is`not`one`of`the`four`basic`financial`statements?
A) balance`sheet
B) trial`balance
C) cash`flows`statement
D) statement`of`comprehensive`income
`Answer:` B
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

14) Which`organization`is`responsible`for`promulgating`U.S.`GAAP?
A) Financial`Accounting`Standards`Board
B) Public`Company`Accounting`Oversight`Board
C) International`Accounting`Standards`Board
D) Securities`and`Exchange`Commission
`Answer:` A
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP/IFRS
AACSB:` ` Application`of`knowledge

15) Which`organization`is`responsible`for`setting`auditing`standards`and`overseeing`the`audits`of`public
`companies`in`the`United`States?
A) Financial`Accounting`Standards`Board
B) Public`Company`Accounting`Oversight`Board
C) American`Institute`of`Certified`Public`Accountants
D) Securities`and`Exchange`Commission
`Answer:` B
Diff:`1
Objective:` 1.1`IFRS/GAA
P:` GAAP
AACSB:` ` Application`of`knowledge




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