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 mj mj mj




1) The financial reporting process generates three basic financial stateme
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nts. Answer: FALSE
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Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

2) The demand for financial information is based on market participant dem
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and. Answer: TRUE
mj m j


Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

3) Managers of economic entities are best considered to be users of financial informa
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tion. Answer: FALSE
mj m j


Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

4) Managers of economic entities are best considered to be preparers of financial informa
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tion. Answer: TRUE
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Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly tra
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ded companies.
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Answer: TRUE m j m j


Diff:mj2
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP
AACSB:m j m j Applicationmjofmjknowledge

6) The FASB gives the SEC authority to regulate accounting for publicly traded compa
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nies. Answer: FALSE
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Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP
AACSB:m j m j Applicationmjofmjknowledge




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c.

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


Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP
AACSB:m j m j Applicationmjofmjknowledge

8) Financial accounting standards influence the behavior of managers and other internal u
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sers. Answer: TRUE
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Diff:mj2
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

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


Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

10) Financial information includes information that is not governed by rules set forth by the accou
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nting standard-setting bodies.
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Answer: TRUE m j m j


Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

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


B) accounting standard setting mj mj


C) financial statement mj


D) financial accountin mj


g Answer: D
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Diff:mj2
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge




2
Copyright © 2022 Pearson Education, In
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c.

, 12) Which element of financial accounting involves identifying the individuals who demand fina
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ncial information?
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A) financial information mj


B) economic entity mj


C) user groups
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D) legal, economic, political, and social environme
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nt Answer: C
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Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

13) Which of the following is not one of the four basic financial statements?
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A) balance sheet mj


B) trial balance
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C) cash flows statement
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D) statement of comprehensive incommj mj mj


e Answer: B
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Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

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 mj mj mj


D) Securities and Exchange Commissio
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n Answer: A
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Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP/IFRS
AACSB:m j m j Applicationmjofmjknowledge

15) Which organization is responsible for setting auditing standards and overseeing the audits of p
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ublic companies in the United States?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) American Institute of Certified Public Accountants
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D) Securities and Exchange Commissio
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n Answer: B
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Diff:mj1
Objective:m j 1.1mjIFRS/GA
AP:m j GAAP
AACSB:m j m j Applicationmjofmjknowledge




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c.