Test Bank Complete_
Intermediate Accounting 3rd Edition, (2022)
By Elizabeth A. Gordon, Jana S. Raedy & Alexander J. Sannella,
All Chapters 1-22| Latest Version With Verified Answers| Rated A+
From: [Bestmaxsolutions.Stuvia
,Chapter 1: The Financial Reporting Environment ----------------------------------------------------------- 3
Chapter 2: Financial Reporting Theory ----------------------------------------------------------------------- 34
Chapter 3: Judgment And Applied Financial Accounting Research ---------------------------------- 123
Chapter 4: Review Of The Accounting Cycle --------------------------------------------------------------- 182
Chapter 5: Statements Of Net Income And Comprehensive Net Income --------------------------- 286
Chapter 6: Statements Of Financial Position And Cash Flows And The Annual Report --------- 368
Chapter 7: Accounting And The Time Value Of Money ------------------------------------------------- 488
Chapter 8: Revenue Recognition ----------------------------------------------------------------------------- 552
Chapter 9: Short-Term Operating Assets: Cash And Receivables------------------------------------- 640
Chapter 10: Short-Term Operating Assets: Inventory --------------------------------------------------- 708
Chapter 11: Long-Term Operating Assets: Acquisition, Cost Allocation, And Derecognition - 809
Chapter 12: Long-Term Operating Assets: Departures From Historical Cost ---------------------- 886
Chapter 13: Operating Liabilities And Contingencies --------------------------------------------------- 963
Chapter 14: Financing Liabilities---------------------------------------------------------------------------- 1018
Chapter 15: Accounting For Stockholders' Equity ------------------------------------------------------ 1135
Chapter 16: Investments In Financial Assets ------------------------------------------------------------ 1216
Chapter 17: Accounting For Income Taxes --------------------------------------------------------------- 1324
Chapter 18: Accounting For Leases ------------------------------------------------------------------------ 1429
Chapter 19: Accounting For Employee Compensation And Benefits ------------------------------ 1540
Chapter 20: Earnings Per Share ----------------------------------------------------------------------------- 1627
Chapter 21: Accounting Changes And Error Analysis -------------------------------------------------- 1688
Chapter 22: The Statement Of Cash Flows --------------------------------------------------------------- 1765
A Genuine Table Of Contents (TOC) For Easy Navigation
,Chapter 1: The Financial Reporting Environment
Elizabeth A. Gordon: Intermediate Accounting 3rd Edition, (2022) Test Bank
1.1 Overview Of Financial Reporting
1) The Financial Reporting Process Generates Three Basic Financial Statements.
ANSWER: False
The Financial Reporting Process Actually Generates Four Basic Financial Statements:
The Income Statement
The Balance Sheet
The Statement Of Cash Flows
The Statement Of Shareholders’ Equity (Or Changes In Equity)
Therefore, Saying That It Generates Only Three Is Incorrect.
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.
ANSWER: True
The Need For Financial Information Arises Because Investors, Creditors, Regulators,
And Other Market Participants Require It To Make Economic Decisions. Their Demand
Drives The Need For Transparency And Accountability In Financial Reporting.
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.
ANSWER: False
Managers Are Internal Parties Who Are Preparers Of Financial Information For External
Users Like Investors. Although They Might Also Use Financial Data For Decision-
Making, In The Context Of Financial Reporting, They Are Best Viewed As Preparers,
Not Just Users.
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
4) Managers Of Economic Entities Are Best Considered To Be Preparers Of Financial
Information.
ANSWER: True
Managers Play A Key Role In Organizing And Presenting Financial Data About Their
Organization. They Ensure Financial Statements Are Prepared According To Accounting
Standards For Use By External Parties.
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
5) The Securities And Exchange Commission (Sec) Regulates Financial Reporting For
Publicly Traded Companies.
ANSWER: True
The Sec Is A U.S. Government Agency That Oversees And Enforces Regulations
Affecting Publicly Traded Companies, Including Financial Reporting. It Has The
Authority To Prescribe Accounting Standards For Public Companies, Although It Relies
On Fasb To Develop Them.
DIFF: 2
,OBJECTIVE: 1.1
IFRS/GAAP: Gaap
AACSB: Application Of Knowledge
6) The Fasb Gives The Sec Authority To Regulate Accounting For Publicly Traded
Companies.
ANSWER: False
The Sec, Created By Congress, Has Legal Authority Over Public Company Reporting.
The Fasb Is A Private Standard-Setting Body That Operates Under The Sec’s Oversight.
Therefore, The Sec Delegates Some Authority To Fasb—Not The Other Way Around.
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.
ANSWER: False
The Pcaob Is Responsible For Overseeing The Auditing Profession (E.G., Setting
Auditing Standards And Inspecting Audit Firms), Not Financial Accounting Standards.
Setting Accounting Standards Is The Responsibility Of The Fasb.
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.
ANSWER: True
Even Though Accounting Standards Are Designed For External Reporting, They
Indirectly Influence Internal Behavior, Such As Decisions On Performance Metrics,
,Compensation, Budgeting, And Tax Planning. Managers May Adjust Behavior To
Achieve Favorable Financial Reporting Outcomes.
DIFF: 2
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
9) Theories And Procedures That Evolve As A Result Of Lobbying From Various
Groups Are Examples Of Proactive Factors Within The Legal, Economic, Political, And
Social Environment.
ANSWER: False
Lobbying Leads To Reactive Factors, Not Proactive Ones. Reactive Factors Emerge As
Responses To External Pressures Or Influences (E.G., Lobbying), While Proactive
Factors Arise From Anticipating Or Leading Change, Such As New Technologies Or
Innovations.
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
10) Financial Information Includes Information That Is Not Governed By Rules Set Forth
By The Accounting Standard-Setting Bodies.
ANSWER: True
Not All Financial Information Is Regulated. For Example, Management Commentary,
Forecasts, And Non-Gaap Metrics Are Often Included In Financial Disclosures But Are
Not Governed By Formal Accounting Standards, Even Though They Provide Valuable
Insights.
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
ANSWER: D
Financial Accounting Is The Process Of Identifying, Measuring, And Communicating
Financial Information About An Entity To Users Such As Investors And Creditors. It
Focuses On Preparing Standardized Reports (Financial Statements) That Reflect Past
Performance.
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 Information?
A) Financial Information
B) Economic Entity
C) User Groups
D) Legal, Economic, Political, And Social Environment
ANSWER: C
User Groups Are The Stakeholders (E.G., Investors, Creditors, Analysts) Who Require
Financial Information To Make Economic Decisions. Identifying These Groups Is
Essential To Tailoring Financial Reporting To Meet Their Informational Needs.
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
, AACSB: Application Of Knowledge
13) Which Of The Following Is Not One Of The Four Basic Financial Statements?
A) Balance Sheet
B) Trial Balance
C) Cash Flows Statement
D) Statement Of Comprehensive Income
ANSWER: B
A Trial Balance Is An Internal Accounting Tool Used To Verify That Debits Equal
Credits. It Is Not One Of The Four Basic Financial Statements, Which Are:
Balance Sheet
Income Statement / Statement Of Comprehensive Income
Statement Of Cash Flows
Statement Of Shareholders’ Equity
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
14) Which Organization Is Responsible For Promulgating U.S. Gaap?
A) Financial Accounting Standards Board
B) Public Company Accounting Oversight Board
C) International Accounting Standards Board D) Securities And Exchange Commission
ANSWER: A
The Fasb (Financial Accounting Standards Board) Is The Private, Independent Body That
Develops And Issues U.S. Generally Accepted Accounting Principles (Gaap).
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
Intermediate Accounting 3rd Edition, (2022)
By Elizabeth A. Gordon, Jana S. Raedy & Alexander J. Sannella,
All Chapters 1-22| Latest Version With Verified Answers| Rated A+
From: [Bestmaxsolutions.Stuvia
,Chapter 1: The Financial Reporting Environment ----------------------------------------------------------- 3
Chapter 2: Financial Reporting Theory ----------------------------------------------------------------------- 34
Chapter 3: Judgment And Applied Financial Accounting Research ---------------------------------- 123
Chapter 4: Review Of The Accounting Cycle --------------------------------------------------------------- 182
Chapter 5: Statements Of Net Income And Comprehensive Net Income --------------------------- 286
Chapter 6: Statements Of Financial Position And Cash Flows And The Annual Report --------- 368
Chapter 7: Accounting And The Time Value Of Money ------------------------------------------------- 488
Chapter 8: Revenue Recognition ----------------------------------------------------------------------------- 552
Chapter 9: Short-Term Operating Assets: Cash And Receivables------------------------------------- 640
Chapter 10: Short-Term Operating Assets: Inventory --------------------------------------------------- 708
Chapter 11: Long-Term Operating Assets: Acquisition, Cost Allocation, And Derecognition - 809
Chapter 12: Long-Term Operating Assets: Departures From Historical Cost ---------------------- 886
Chapter 13: Operating Liabilities And Contingencies --------------------------------------------------- 963
Chapter 14: Financing Liabilities---------------------------------------------------------------------------- 1018
Chapter 15: Accounting For Stockholders' Equity ------------------------------------------------------ 1135
Chapter 16: Investments In Financial Assets ------------------------------------------------------------ 1216
Chapter 17: Accounting For Income Taxes --------------------------------------------------------------- 1324
Chapter 18: Accounting For Leases ------------------------------------------------------------------------ 1429
Chapter 19: Accounting For Employee Compensation And Benefits ------------------------------ 1540
Chapter 20: Earnings Per Share ----------------------------------------------------------------------------- 1627
Chapter 21: Accounting Changes And Error Analysis -------------------------------------------------- 1688
Chapter 22: The Statement Of Cash Flows --------------------------------------------------------------- 1765
A Genuine Table Of Contents (TOC) For Easy Navigation
,Chapter 1: The Financial Reporting Environment
Elizabeth A. Gordon: Intermediate Accounting 3rd Edition, (2022) Test Bank
1.1 Overview Of Financial Reporting
1) The Financial Reporting Process Generates Three Basic Financial Statements.
ANSWER: False
The Financial Reporting Process Actually Generates Four Basic Financial Statements:
The Income Statement
The Balance Sheet
The Statement Of Cash Flows
The Statement Of Shareholders’ Equity (Or Changes In Equity)
Therefore, Saying That It Generates Only Three Is Incorrect.
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.
ANSWER: True
The Need For Financial Information Arises Because Investors, Creditors, Regulators,
And Other Market Participants Require It To Make Economic Decisions. Their Demand
Drives The Need For Transparency And Accountability In Financial Reporting.
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.
ANSWER: False
Managers Are Internal Parties Who Are Preparers Of Financial Information For External
Users Like Investors. Although They Might Also Use Financial Data For Decision-
Making, In The Context Of Financial Reporting, They Are Best Viewed As Preparers,
Not Just Users.
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
4) Managers Of Economic Entities Are Best Considered To Be Preparers Of Financial
Information.
ANSWER: True
Managers Play A Key Role In Organizing And Presenting Financial Data About Their
Organization. They Ensure Financial Statements Are Prepared According To Accounting
Standards For Use By External Parties.
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
5) The Securities And Exchange Commission (Sec) Regulates Financial Reporting For
Publicly Traded Companies.
ANSWER: True
The Sec Is A U.S. Government Agency That Oversees And Enforces Regulations
Affecting Publicly Traded Companies, Including Financial Reporting. It Has The
Authority To Prescribe Accounting Standards For Public Companies, Although It Relies
On Fasb To Develop Them.
DIFF: 2
,OBJECTIVE: 1.1
IFRS/GAAP: Gaap
AACSB: Application Of Knowledge
6) The Fasb Gives The Sec Authority To Regulate Accounting For Publicly Traded
Companies.
ANSWER: False
The Sec, Created By Congress, Has Legal Authority Over Public Company Reporting.
The Fasb Is A Private Standard-Setting Body That Operates Under The Sec’s Oversight.
Therefore, The Sec Delegates Some Authority To Fasb—Not The Other Way Around.
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.
ANSWER: False
The Pcaob Is Responsible For Overseeing The Auditing Profession (E.G., Setting
Auditing Standards And Inspecting Audit Firms), Not Financial Accounting Standards.
Setting Accounting Standards Is The Responsibility Of The Fasb.
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.
ANSWER: True
Even Though Accounting Standards Are Designed For External Reporting, They
Indirectly Influence Internal Behavior, Such As Decisions On Performance Metrics,
,Compensation, Budgeting, And Tax Planning. Managers May Adjust Behavior To
Achieve Favorable Financial Reporting Outcomes.
DIFF: 2
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
9) Theories And Procedures That Evolve As A Result Of Lobbying From Various
Groups Are Examples Of Proactive Factors Within The Legal, Economic, Political, And
Social Environment.
ANSWER: False
Lobbying Leads To Reactive Factors, Not Proactive Ones. Reactive Factors Emerge As
Responses To External Pressures Or Influences (E.G., Lobbying), While Proactive
Factors Arise From Anticipating Or Leading Change, Such As New Technologies Or
Innovations.
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
10) Financial Information Includes Information That Is Not Governed By Rules Set Forth
By The Accounting Standard-Setting Bodies.
ANSWER: True
Not All Financial Information Is Regulated. For Example, Management Commentary,
Forecasts, And Non-Gaap Metrics Are Often Included In Financial Disclosures But Are
Not Governed By Formal Accounting Standards, Even Though They Provide Valuable
Insights.
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
ANSWER: D
Financial Accounting Is The Process Of Identifying, Measuring, And Communicating
Financial Information About An Entity To Users Such As Investors And Creditors. It
Focuses On Preparing Standardized Reports (Financial Statements) That Reflect Past
Performance.
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 Information?
A) Financial Information
B) Economic Entity
C) User Groups
D) Legal, Economic, Political, And Social Environment
ANSWER: C
User Groups Are The Stakeholders (E.G., Investors, Creditors, Analysts) Who Require
Financial Information To Make Economic Decisions. Identifying These Groups Is
Essential To Tailoring Financial Reporting To Meet Their Informational Needs.
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
, AACSB: Application Of Knowledge
13) Which Of The Following Is Not One Of The Four Basic Financial Statements?
A) Balance Sheet
B) Trial Balance
C) Cash Flows Statement
D) Statement Of Comprehensive Income
ANSWER: B
A Trial Balance Is An Internal Accounting Tool Used To Verify That Debits Equal
Credits. It Is Not One Of The Four Basic Financial Statements, Which Are:
Balance Sheet
Income Statement / Statement Of Comprehensive Income
Statement Of Cash Flows
Statement Of Shareholders’ Equity
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
14) Which Organization Is Responsible For Promulgating U.S. Gaap?
A) Financial Accounting Standards Board
B) Public Company Accounting Oversight Board
C) International Accounting Standards Board D) Securities And Exchange Commission
ANSWER: A
The Fasb (Financial Accounting Standards Board) Is The Private, Independent Body That
Develops And Issues U.S. Generally Accepted Accounting Principles (Gaap).
DIFF: 1
OBJECTIVE: 1.1
IFRS/GAAP: Gaap/Ifrs
AACSB: Application Of Knowledge
