@1
,Intermediate Accounting, 4e (Gordon/Raedy/Sannella)
@1 @1 @1
Chapter 1 The Financial Reporting Environment
@1 @1 @1 @1
1.1 Overview of Financial Reporting @1 @1 @1
1) The financial reporting process generates three basic financial stateme
@1 @1 @1 @1 @1 @1 @1 @1
nts. Answer: FALSE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
2) The demand for financial information is based on market participant dem
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1
and. Answer: TRUE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
3) Managers of economic entities are best considered to be users of financial inform
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ation. Answer: FALSE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
4) Managers of economic entities are best considered to be preparers of financial inform
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ation. Answer: TRUE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly tr
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
aded companies.
@1
Answer: TRUE @ 1 @ 1
Diff:@12
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP
AACSB:@ 1 @ 1 Application@1of@1knowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded comp
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
anies. Answer: FALSE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP
AACSB:@ 1 @ 1 Application@1of@1knowledge
1
Copyright © 2022 Pearson Education, I
@1 @1 @1 @1 @1
nc.
,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1
and oversees the audits of public companies in the United States.
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
Answer: FALSE @ 1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP
AACSB:@ 1 @ 1 Application@1of@1knowledge
8) Financial accounting standards influence the behavior of managers and other internal
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
users. Answer: TRUE
@1 @ 1
Diff:@12
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
9) Theories and procedures that evolve as a result of lobbying from various groups are exam
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ples of proactive factors within the legal, economic, political, and social environment.
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
Answer: FALSE @ 1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
10) Financial information includes information that is not governed by rules set forth by the acco
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
unting standard-setting bodies.
@1 @1
Answer: TRUE @ 1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
11) What is the term that describes the process of identifying, measuring, and communicating fin
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ancial information about an economic entity to various user groups?
@1 @1 @1 @1 @1 @1 @1 @1 @1
A) financial reporting @1
B) accounting standard setting @1 @1
C) financial statement @1
D) financial accountin @1
g Answer: D
@1 @ 1
Diff:@12
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
2
Copyright © 2022 Pearson Education, I
@1 @1 @1 @1 @1
nc.
, 12) Which element of financial accounting involves identifying the individuals who demand fina
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ncial information?
@1
A) financial information @1
B) economic entity @1
C) user groups
@1
D) legal, economic, political, and social environme
@1 @1 @1 @1 @1
nt Answer: C
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
13) Which of the following is not one of the four basic financial statements?
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
A) balance sheet @1
B) trial balance
@1
C) cash flows statement
@1 @1
D) statement of comprehensive incom @1 @1 @1
e Answer: B
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
14) Which organization is responsible for promulgating U.S. GAAP?
@1 @1 @1 @1 @1 @1 @1
A) Financial Accounting Standards Board
@1 @1 @1
B) Public Company Accounting Oversight Board
@1 @1 @1 @1
C) International Accounting Standards Board @1 @1 @1
D) Securities and Exchange Commissio
@1 @1 @1
n Answer: A
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
15) Which organization is responsible for setting auditing standards and overseeing the audits of
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
public companies in the United States?
@1 @1 @1 @1 @1
A) Financial Accounting Standards Board
@1 @1 @1
B) Public Company Accounting Oversight Board
@1 @1 @1 @1
C) American Institute of Certified Public Accountants
@1 @1 @1 @1 @1
D) Securities and Exchange Commissio
@1 @1 @1
n Answer: B
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP
AACSB:@ 1 @ 1 Application@1of@1knowledge
3
Copyright © 2022 Pearson Education, I
@1 @1 @1 @1 @1
nc.
,Intermediate Accounting, 4e (Gordon/Raedy/Sannella)
@1 @1 @1
Chapter 1 The Financial Reporting Environment
@1 @1 @1 @1
1.1 Overview of Financial Reporting @1 @1 @1
1) The financial reporting process generates three basic financial stateme
@1 @1 @1 @1 @1 @1 @1 @1
nts. Answer: FALSE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
2) The demand for financial information is based on market participant dem
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1
and. Answer: TRUE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
3) Managers of economic entities are best considered to be users of financial inform
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ation. Answer: FALSE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
4) Managers of economic entities are best considered to be preparers of financial inform
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ation. Answer: TRUE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly tr
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
aded companies.
@1
Answer: TRUE @ 1 @ 1
Diff:@12
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP
AACSB:@ 1 @ 1 Application@1of@1knowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded comp
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
anies. Answer: FALSE
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP
AACSB:@ 1 @ 1 Application@1of@1knowledge
1
Copyright © 2022 Pearson Education, I
@1 @1 @1 @1 @1
nc.
,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1
and oversees the audits of public companies in the United States.
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
Answer: FALSE @ 1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP
AACSB:@ 1 @ 1 Application@1of@1knowledge
8) Financial accounting standards influence the behavior of managers and other internal
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
users. Answer: TRUE
@1 @ 1
Diff:@12
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
9) Theories and procedures that evolve as a result of lobbying from various groups are exam
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ples of proactive factors within the legal, economic, political, and social environment.
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
Answer: FALSE @ 1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
10) Financial information includes information that is not governed by rules set forth by the acco
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
unting standard-setting bodies.
@1 @1
Answer: TRUE @ 1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
11) What is the term that describes the process of identifying, measuring, and communicating fin
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ancial information about an economic entity to various user groups?
@1 @1 @1 @1 @1 @1 @1 @1 @1
A) financial reporting @1
B) accounting standard setting @1 @1
C) financial statement @1
D) financial accountin @1
g Answer: D
@1 @ 1
Diff:@12
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
2
Copyright © 2022 Pearson Education, I
@1 @1 @1 @1 @1
nc.
, 12) Which element of financial accounting involves identifying the individuals who demand fina
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
ncial information?
@1
A) financial information @1
B) economic entity @1
C) user groups
@1
D) legal, economic, political, and social environme
@1 @1 @1 @1 @1
nt Answer: C
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
13) Which of the following is not one of the four basic financial statements?
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
A) balance sheet @1
B) trial balance
@1
C) cash flows statement
@1 @1
D) statement of comprehensive incom @1 @1 @1
e Answer: B
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
14) Which organization is responsible for promulgating U.S. GAAP?
@1 @1 @1 @1 @1 @1 @1
A) Financial Accounting Standards Board
@1 @1 @1
B) Public Company Accounting Oversight Board
@1 @1 @1 @1
C) International Accounting Standards Board @1 @1 @1
D) Securities and Exchange Commissio
@1 @1 @1
n Answer: A
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP/IFRS
AACSB:@ 1 @ 1 Application@1of@1knowledge
15) Which organization is responsible for setting auditing standards and overseeing the audits of
@1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1 @1
public companies in the United States?
@1 @1 @1 @1 @1
A) Financial Accounting Standards Board
@1 @1 @1
B) Public Company Accounting Oversight Board
@1 @1 @1 @1
C) American Institute of Certified Public Accountants
@1 @1 @1 @1 @1
D) Securities and Exchange Commissio
@1 @1 @1
n Answer: B
@1 @ 1
Diff:@11
Objective:@ 1 1.1@1IFRS/GA
AP:@ 1 GAAP
AACSB:@ 1 @ 1 Application@1of@1knowledge
3
Copyright © 2022 Pearson Education, I
@1 @1 @1 @1 @1
nc.
