,Intermediate Accounting, 3e (Gordon/Raedy/Sannella)
0k 0k 0k
Chapter 1 The Financial Reporting Environment
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1.1 Overview of Financial Reporting 0k 0k 0k
1) The financial reporting process generates three basic financial statemen
0k 0k 0k 0k 0k 0k 0k 0k
ts. Answer: FALSE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
2) The demand for financial information is based on market participant dema
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
nd. Answer: TRUE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
3) Managers of economic entities are best considered to be users of financial informat
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ion. Answer: FALSE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
4) Managers of economic entities are best considered to be preparers of financial informat
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ion. Answer: TRUE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly tra
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ded companies.
0k
Answer: TRUE 0 k 0 k
Diff:0k2
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP
AACSB:0 k 0 k Application0kof0kknowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded compa
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
nies. Answer: FALSE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP
AACSB:0 k 0 k Application0kof0kknowledge
1
Copyright © 2022 Pearson Education, Inc
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.
,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
and oversees the audits of public companies in the United States.
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
Answer: FALSE 0 k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP
AACSB:0 k 0 k Application0kof0kknowledge
8) Financial accounting standards influence the behavior of managers and other internal us
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ers. Answer: TRUE
0k 0 k
Diff:0k2
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
9) Theories and procedures that evolve as a result of lobbying from various groups are exampl
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
es of proactive factors within the legal, economic, political, and social environment.
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
Answer: FALSE 0 k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
10) Financial information includes information that is not governed by rules set forth by the accou
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
nting standard-setting bodies.
0k 0k
Answer: TRUE 0 k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
11) What is the term that describes the process of identifying, measuring, and communicating fina
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ncial information about an economic entity to various user groups?
0k 0k 0k 0k 0k 0k 0k 0k 0k
A) financial reporting 0k
B) accounting standard setting 0k 0k
C) financial statement 0k
D) financial accounting 0k
Answer: D
0k 0 k
Diff:0k2
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
2
Copyright © 2022 Pearson Education, Inc
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.
, 12) Which element of financial accounting involves identifying the individuals who demand finan
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
cial information?
0k
A) financial information 0k
B) economic entity 0k
C) user groups 0k
D) legal, economic, political, and social environme
0k 0k 0k 0k 0k
nt Answer: C
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
13) Which of the following is not one of the four basic financial statements?
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
A) balance sheet 0k
B) trial balance 0k
C) cash flows statement
0k 0k
D) statement of comprehensive incom 0k 0k 0k
e Answer: B
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
14) Which organization is responsible for promulgating U.S. GAAP?
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A) Financial Accounting Standards Board
0k 0k 0k
B) Public Company Accounting Oversight Board
0k 0k 0k 0k
C) International Accounting Standards Board 0k 0k 0k
D) Securities and Exchange Commissio 0k 0k 0k
n Answer: A
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
15) Which organization is responsible for setting auditing standards and overseeing the audits of p
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ublic companies in the United States?
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A) Financial Accounting Standards Board
0k 0k 0k
B) Public Company Accounting Oversight Board
0k 0k 0k 0k
C) American Institute of Certified Public Accountants
0k 0k 0k 0k 0k
D) Securities and Exchange Commissio 0k 0k 0k
n Answer: B
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP
AACSB:0 k 0 k Application0kof0kknowledge
3
Copyright © 2022 Pearson Education, Inc
0k 0k 0k 0k 0k
.
0k 0k 0k
Chapter 1 The Financial Reporting Environment
0k 0k 0k 0k
1.1 Overview of Financial Reporting 0k 0k 0k
1) The financial reporting process generates three basic financial statemen
0k 0k 0k 0k 0k 0k 0k 0k
ts. Answer: FALSE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
2) The demand for financial information is based on market participant dema
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
nd. Answer: TRUE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
3) Managers of economic entities are best considered to be users of financial informat
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ion. Answer: FALSE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
4) Managers of economic entities are best considered to be preparers of financial informat
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ion. Answer: TRUE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly tra
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ded companies.
0k
Answer: TRUE 0 k 0 k
Diff:0k2
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP
AACSB:0 k 0 k Application0kof0kknowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded compa
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
nies. Answer: FALSE
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP
AACSB:0 k 0 k Application0kof0kknowledge
1
Copyright © 2022 Pearson Education, Inc
0k 0k 0k 0k 0k
.
,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
and oversees the audits of public companies in the United States.
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
Answer: FALSE 0 k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP
AACSB:0 k 0 k Application0kof0kknowledge
8) Financial accounting standards influence the behavior of managers and other internal us
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ers. Answer: TRUE
0k 0 k
Diff:0k2
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
9) Theories and procedures that evolve as a result of lobbying from various groups are exampl
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
es of proactive factors within the legal, economic, political, and social environment.
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
Answer: FALSE 0 k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
10) Financial information includes information that is not governed by rules set forth by the accou
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
nting standard-setting bodies.
0k 0k
Answer: TRUE 0 k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
11) What is the term that describes the process of identifying, measuring, and communicating fina
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ncial information about an economic entity to various user groups?
0k 0k 0k 0k 0k 0k 0k 0k 0k
A) financial reporting 0k
B) accounting standard setting 0k 0k
C) financial statement 0k
D) financial accounting 0k
Answer: D
0k 0 k
Diff:0k2
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
2
Copyright © 2022 Pearson Education, Inc
0k 0k 0k 0k 0k
.
, 12) Which element of financial accounting involves identifying the individuals who demand finan
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
cial information?
0k
A) financial information 0k
B) economic entity 0k
C) user groups 0k
D) legal, economic, political, and social environme
0k 0k 0k 0k 0k
nt Answer: C
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
13) Which of the following is not one of the four basic financial statements?
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
A) balance sheet 0k
B) trial balance 0k
C) cash flows statement
0k 0k
D) statement of comprehensive incom 0k 0k 0k
e Answer: B
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
14) Which organization is responsible for promulgating U.S. GAAP?
0k 0k 0k 0k 0k 0k 0k
A) Financial Accounting Standards Board
0k 0k 0k
B) Public Company Accounting Oversight Board
0k 0k 0k 0k
C) International Accounting Standards Board 0k 0k 0k
D) Securities and Exchange Commissio 0k 0k 0k
n Answer: A
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP/IFRS
AACSB:0 k 0 k Application0kof0kknowledge
15) Which organization is responsible for setting auditing standards and overseeing the audits of p
0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k 0k
ublic companies in the United States?
0k 0k 0k 0k 0k
A) Financial Accounting Standards Board
0k 0k 0k
B) Public Company Accounting Oversight Board
0k 0k 0k 0k
C) American Institute of Certified Public Accountants
0k 0k 0k 0k 0k
D) Securities and Exchange Commissio 0k 0k 0k
n Answer: B
0k 0 k
Diff:0k1
Objective:0 k 1.10kIFRS/GA
AP:0 k GAAP
AACSB:0 k 0 k Application0kof0kknowledge
3
Copyright © 2022 Pearson Education, Inc
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