TEST BANK for Intermediate Accounting 3rd Edition, by Elizabeth Gordon, Jana Raedy, Alexander Sannella All Chapters Covered 1-22| 100% Verified Questions & Accurate Solutions| Exam Preparation Q&As| A+

Franklyn A Plus Pass



TEST BANK for Intermediate Accounting 3rd Edition, by
Elizabeth Gordon, Jana Raedy, Alexander Sannella
All Chapters Covered 1-22| 100% Verified Questions &
Accurate Solutions| Exam Preparation Q&As| A+ PASS
ASSURED
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, Franklyn A Plus Pass


Chapter 1 The Financial Reporting Environment

1.1 Overview of Financial Reporting

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

Diff: 1

Objective: 1.1 IFRS/GAAP: GAAP/IFRS

AACSB: Application of knowledge



2) The demand for financial information is based on market participant demand. Correct Answer: TRUE

Diff: 1

Objective: 1.1 IFRS/GAAP: GAAP/IFRS

AACSB: Application of knowledge



3) Managers of economic entities are best considered to be users of financial information. Correct
Answer: FALSE

Diff: 1

Objective: 1.1 IFRS/GAAP: GAAP/IFRS

AACSB: Application of knowledge
Fr
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4) Managers of economic entities are best considered to be preparers of financial information. Correct
Answer: TRUE
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Diff: 1
yn




Objective: 1.1 IFRS/GAAP: GAAP/IFRS

AACSB: Application of knowledge
e
A




5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly traded
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companies.
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Correct Answer: TRUE

Diff: 2
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Objective: 1.1 IFRS/GAAP: GAAP

AACSB: Application of knowledge



6) The FASB gives the SEC authority to regulate accounting for publicly traded companies. Correct
Answer: FALSE

Diff: 1

Objective: 1.1 IFRS/GAAP: GAAP

AACSB: Application of knowledge



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

Correct Answer: FALSE

Diff: 1

Objective: 1.1 IFRS/GAAP: GAAP

AACSB: Application of knowledge



8) Financial accounting standards influence the behavior of managers and other internal users. Correct
Answer: TRUE
Fr




Diff: 2
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Objective: 1.1 IFRS/GAAP: GAAP/IFRS

AACSB: Application of knowledge
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yn




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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Correct Answer: FALSE

Diff: 1
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Objective: 1.1 IFRS/GAAP: GAAP/IFRS
us




AACSB: Application of knowledge
Pa




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

Correct Answer: TRUE

Diff: 1

Objective: 1.1 IFRS/GAAP: 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 Correct Answer: D

Diff: 2

Objective: 1.1 IFRS/GAAP: GAAP/IFRS

AACSB: Application of knowledge



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

B) economic entity
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C) user groups
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D) legal, economic, political, and social environment Correct Answer: C
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Diff: 1
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Objective: 1.1 IFRS/GAAP: GAAP/IFRS
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AACSB: Application of knowledge
us
Pa




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