TEST BANK
Intermediate Accounting, 18th Edition
by Kieso, Warfield Chapter 1 - 23 Complete
,Table of Contents hq hq
1 The Environment and Conceptual Framework of Financial Reporting
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2 The Accounting Information System
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3 Income Statement, Related Information, and Revenue Recognition
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4 Balance Sheet and Statement of Cash Flows
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5 Accounting and the Time Value of Money
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6 Cash and Receivables
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7 Valuation of Inventories: A Cost-Basis Approach
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8 Inventories: Additional Valuation Issues
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9 Acquisition and Disposition of Property, Plant, and Equipment
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10 Depreciation, Impairments, and Depletion
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11 Intangible Assets
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12 Current Liabilities and Contingencies
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13 Long-Term Liabilities
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14 Stockholders’ Equity
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15 Dilutive Securities and Earnings per Share
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16 Investments
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17 Revenue Recognition
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18 Accounting for Income Taxes
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19 Accounting for Pensions and Postretirement Benefits
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20 Accounting for Leases
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21 Accounting Changes and Error Analysis
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22 Statement of Cash Flows
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23 Full Disclosure in Financial Reporting
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, CHAPTER 1 hq
THE ENVIRONMENT AND CONCEPTUAL FRAMEWORK OF FINANCI
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AL REPORTING hq
IFRS questions are available at the end of this chapter.
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TRUE-FALSE—Conceptual
1. Financial statements are the principal means through which a company communicates its financial inf
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ormation to those outside it. hq hq hq hq
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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2. Users of financial reports of a company use the information provided by these reports to make
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capital allocation decisions. hq hq
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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3. An effective process of capital allocation provides an efficient market for buying and selling securities a
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nd obtaining and granting credit.
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Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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4. Investors are interested in financial reporting because it provides information that is useful for making d
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ecisions.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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5. Users of financial accounting statements have both coinciding and conflicting needs for infor
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mation of various types. hq hq hq
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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6. Although the FASB has developed a conceptual framework, no Statements of Financial Accounting Con
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cepts have been issued to date. hq hq hq hq hq
Ans: F, LO: 1, Bloom: K, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Financial
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Statement Analysis, IFRS: None
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7. The passage of a new FASB Accounting Standards Update requires the support of five of the seven boa
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rd members. hq
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
Financial Statement Preparation, IFRS: Nonehq hq hq hq
8. Statements of Financial Accounting Concepts set forth fundamental objectives and concepts that are
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used by the FASB in developing future standards of financial accounting and reporting.
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Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Analysis, IFRS: None
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9. The FASB’s Codification creates a new set of GAAP.
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Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
Financial Statement Analysis, IFRS: None hq hq hq hq
, 1-2
hq hq Test Bank for Intermediate Accounting, Eighteenth Edition
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10. The objective of financial reporting is to report the plans made by a company to improve the productivit
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y of its employees.
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Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq hq hq h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
ancial Statement Preparation, IFRS: None hq hq hq hq
11. A soundly developed conceptual framework enables the FASB to issue more useful and consis
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tent pronouncements over time.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
12. A conceptual framework is a coherent system of concepts that flow from an objective.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
13. The first level of the conceptual framework identifies the recognition, measurement, and discl
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osure concepts used in establishing accounting standards.
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Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
14. The objective of financial reporting serves as the foundation of the conceptual framework.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
15. Users of financial statements are assumed to need no knowledge of business and financial accounting
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matters to understand the information contained in financial statements.
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Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
16. Relevance and faithful representation are the two fundamental qualities that make a
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ccounting information useful for decision-making. hq hq hq hq
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
17. The idea of consistency does not mean that companies cannot switch from one accounting method to
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another.
Ans: T, LO: 2, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Financial S
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tatement Analysis, IFRS: None hq hq hq
18. Timeliness and neutrality are two ingredients of relevance. hq hq hq hq hq hq hq
Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
19. Verifiability and predictive value are two ingredients of faithful representation.
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Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq hq h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
20. Revenues, gains, and distributions to owners all increase equity.hq hq hq hq hq hq hq hq
Ans: F, LO: 2, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA PC
h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q hq
: None, IMA: Reporting & Control: Financial Statement Analysis, IFRS: None
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21. Comprehensive income includes all changes in equity during a period except those r h q h q h q h q h q h q h q h q h q h q h q hq
esulting from investments by owners and distributions to owners.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA
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eporting & Control: Financial Statement Analysis, IFRS: None
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Intermediate Accounting, 18th Edition
by Kieso, Warfield Chapter 1 - 23 Complete
,Table of Contents hq hq
1 The Environment and Conceptual Framework of Financial Reporting
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2 The Accounting Information System
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3 Income Statement, Related Information, and Revenue Recognition
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4 Balance Sheet and Statement of Cash Flows
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5 Accounting and the Time Value of Money
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6 Cash and Receivables
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7 Valuation of Inventories: A Cost-Basis Approach
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8 Inventories: Additional Valuation Issues
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9 Acquisition and Disposition of Property, Plant, and Equipment
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10 Depreciation, Impairments, and Depletion
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11 Intangible Assets
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12 Current Liabilities and Contingencies
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13 Long-Term Liabilities
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14 Stockholders’ Equity
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15 Dilutive Securities and Earnings per Share
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16 Investments
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17 Revenue Recognition
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18 Accounting for Income Taxes
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19 Accounting for Pensions and Postretirement Benefits
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20 Accounting for Leases
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21 Accounting Changes and Error Analysis
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22 Statement of Cash Flows
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23 Full Disclosure in Financial Reporting
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, CHAPTER 1 hq
THE ENVIRONMENT AND CONCEPTUAL FRAMEWORK OF FINANCI
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AL REPORTING hq
IFRS questions are available at the end of this chapter.
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TRUE-FALSE—Conceptual
1. Financial statements are the principal means through which a company communicates its financial inf
hq hq hq hq hq hq hq hq hq hq hq hq hq
ormation to those outside it. hq hq hq hq
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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2. Users of financial reports of a company use the information provided by these reports to make
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capital allocation decisions. hq hq
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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3. An effective process of capital allocation provides an efficient market for buying and selling securities a
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nd obtaining and granting credit.
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Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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4. Investors are interested in financial reporting because it provides information that is useful for making d
hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq
ecisions.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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5. Users of financial accounting statements have both coinciding and conflicting needs for infor
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mation of various types. hq hq hq
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Preparation, IFRS: None
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6. Although the FASB has developed a conceptual framework, no Statements of Financial Accounting Con
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cepts have been issued to date. hq hq hq hq hq
Ans: F, LO: 1, Bloom: K, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Financial
hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq h q hq
Statement Analysis, IFRS: None
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7. The passage of a new FASB Accounting Standards Update requires the support of five of the seven boa
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rd members. hq
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
Financial Statement Preparation, IFRS: Nonehq hq hq hq
8. Statements of Financial Accounting Concepts set forth fundamental objectives and concepts that are
hq hq hq hq hq hq hq hq hq h q hq hq hq
used by the FASB in developing future standards of financial accounting and reporting.
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Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
inancial Statement Analysis, IFRS: None
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9. The FASB’s Codification creates a new set of GAAP.
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Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
Financial Statement Analysis, IFRS: None hq hq hq hq
, 1-2
hq hq Test Bank for Intermediate Accounting, Eighteenth Edition
hq hq hq hq hq hq
10. The objective of financial reporting is to report the plans made by a company to improve the productivit
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y of its employees.
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Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq hq hq h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
ancial Statement Preparation, IFRS: None hq hq hq hq
11. A soundly developed conceptual framework enables the FASB to issue more useful and consis
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tent pronouncements over time.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
12. A conceptual framework is a coherent system of concepts that flow from an objective.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
13. The first level of the conceptual framework identifies the recognition, measurement, and discl
h q h q h q h q h q h q h q h q h q h q h q hq
osure concepts used in establishing accounting standards.
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Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
14. The objective of financial reporting serves as the foundation of the conceptual framework.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
15. Users of financial statements are assumed to need no knowledge of business and financial accounting
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matters to understand the information contained in financial statements.
hq hq hq hq hq hq hq hq
Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
16. Relevance and faithful representation are the two fundamental qualities that make a
h q h q h q h q h q h q h q h q h q h q hq
ccounting information useful for decision-making. hq hq hq hq
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q hq hq hq h q hq h q h q hq hq hq hq h q hq hq h q hq hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
17. The idea of consistency does not mean that companies cannot switch from one accounting method to
hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq
another.
Ans: T, LO: 2, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Financial S
hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq h q hq hq
tatement Analysis, IFRS: None hq hq hq
18. Timeliness and neutrality are two ingredients of relevance. hq hq hq hq hq hq hq
Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq h q h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
19. Verifiability and predictive value are two ingredients of faithful representation.
hq hq hq hq hq hq hq hq hq
Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
h q h q hq hq h q h q h q h q hq hq hq hq h q hq hq h q h q hq h q hq hq hq h q h q hq
ancial Statement Analysis, IFRS: None hq hq hq hq
20. Revenues, gains, and distributions to owners all increase equity.hq hq hq hq hq hq hq hq
Ans: F, LO: 2, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA PC
h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q h q hq
: None, IMA: Reporting & Control: Financial Statement Analysis, IFRS: None
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21. Comprehensive income includes all changes in equity during a period except those r h q h q h q h q h q h q h q h q h q h q h q hq
esulting from investments by owners and distributions to owners.
hq hq hq hq hq hq hq hq
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA
hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq hq h q PC: None, IMA: R
hq hq hq
eporting & Control: Financial Statement Analysis, IFRS: None
hq hq hq hq hq hq hq
