Test Bank for For Intermediate Accounting 3rd Edition by Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella All Chapters Fully Covered A+ Guide ISBN:9780136946694 Newest Version 2025

,Intermediate Accounting, 3e (Gordon/Raedy/Sannella)
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Chapter 1 The Financial Reporting Environment
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1.1 Overview of Financial Reporting sx sx sx




1) The financial reporting process generates three basic financial statement
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s. Answer: FALSE
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Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

2) The demand for financial information is based on market participant deman
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d. Answer: TRUE
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

3) Managers of economic entities are best considered to be users of financial informati
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on. Answer: FALSE
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

4) Managers of economic entities are best considered to be preparers of financial informati
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on. Answer: TRUE
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly trad
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ed companies.
sx


Answer: TRUE s x s x


Diff:sx2
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP
AACSB:s x s x Applicationsxofsxknowledge

6) The FASB gives the SEC authority to regulate accounting for publicly traded compani
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es. Answer: FALSE
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP
AACSB:s x s x Applicationsxofsxknowledge




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


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP
AACSB:s x s x Applicationsxofsxknowledge

8) Financial accounting standards influence the behavior of managers and other internal use
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rs. Answer: TRUE
sx s x


Diff:sx2
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

9) Theories and procedures that evolve as a result of lobbying from various groups are example
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s of proactive factors within the legal, economic, political, and social environment.
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Answer: FALSE s x s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

10) Financial information includes information that is not governed by rules set forth by the account
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ing standard-setting bodies.
sx sx


Answer: TRUE s x s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

11) What is the term that describes the process of identifying, measuring, and communicating finan
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cial information about an economic entity to various user groups?
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A) financial reporting sx


B) accounting standard setting sx sx


C) financial statement sx


D) financial accounting sx


Answer: D
sx s x


Diff:sx2
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge




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, 12) Which element of financial accounting involves identifying the individuals who demand financ
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ial information?
sx


A) financial information sx


B) economic entity sx


C) user groups sx


D) legal, economic, political, and social environmen
sx sx sx sx sx


t Answer: C
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

13) Which of the following is not one of the four basic financial statements?
sx sx sx sx sx sx sx sx sx sx sx sx


A) balance sheet sx


B) trial balancesx


C) cash flows statement
sx sx


D) statement of comprehensive income sx sx sx


Answer: B
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

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 sx sx sx


D) Securities and Exchange Commission sx sx sx


Answer: A
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

15) Which organization is responsible for setting auditing standards and overseeing the audits of pu
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blic companies in the United States?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
sx sx sx sx


C) American Institute of Certified Public Accountants
sx sx sx sx sx


D) Securities and Exchange Commission sx sx sx


Answer: B
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP
AACSB:s x s x Applicationsxofsxknowledge




3
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