,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 Reporting0 0 0
1) The financial reporting process generates three basic financial statements.
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Answer: FALSE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
2) The demand for financial information is based on market participant demand.
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Answer: TRUE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
3) Managers of economic entities are best considered to be users of financial information.
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Answer: FALSE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
4) Managers of economic entities are best considered to be preparers of financial information.
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Answer: TRUE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly traded c
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ompanies.
Answer: TRUE
0 0
Diff:02
Objective:0 1.10IFRS/GAA
P:0 GAAP
AACSB:0 0 Application0of0knowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded companies.
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Answer: FALSE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP
AACSB:0 0 Application0of0knowledge
1
Copyright © 2022 Pearson Education, Inc.
0 0 0 0 0
,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards and o
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versees the audits of public companies in the United States.
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Answer: FALSE 0 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP
AACSB:0 0 Application0of0knowledge
8) Financial accounting standards influence the behavior of managers and other internal users.
0 0 0 0 0 0 0 0 0 0 0 0
Answer: TRUE 0
Diff:02
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
9) Theories and procedures that evolve as a result of lobbying from various groups are examples of p
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
roactive factors within the legal, economic, political, and social environment.
0 0 0 0 0 0 0 0 0
Answer: FALSE 0 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
10) Financial information includes information that is not governed by rules set forth by the accounting s
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
tandard-setting bodies. 0
Answer: TRUE 0 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
11) What is the term that describes the process of identifying, measuring, and communicating financial i
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nformation about an economic entity to various user groups?
0 0 0 0 0 0 0 0
A) financial reporting 0
B) accounting standard setting 0 0
C) financial statement 0
D) financial accounting 0
Answer: D
0 0
Diff:02
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
2
Copyright © 2022 Pearson Education, Inc.
0 0 0 0 0
, 12) Which element of financial accounting involves identifying the individuals who demand financial i
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nformation?
A) financial information 0
B) economic entity 0
C) user groups
0
D) legal, economic, political, and social environment
0 0 0 0 0 0
Answer: C 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
13) Which of the following is not one of the four basic financial statements?
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A) balance sheet 0
B) trial balance
0
C) cash flows statement
0 0
D) statement of comprehensive income 0 0 0 0
Answer: B 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
14) Which organization is responsible for promulgating U.S. GAAP?
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A) Financial Accounting Standards Board
0 0 0
B) Public Company Accounting Oversight Board
0 0 0 0
C) International Accounting Standards Board 0 0 0
D) Securities and Exchange Commission 0 0 0 0
Answer: A 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
15) Which organization is responsible for setting auditing standards and overseeing the audits of public c
0 0 0 0 0 0 0 0 0 0 0 0 0 0
ompanies in the United States?
0 0 0 0
A) Financial Accounting Standards Board
0 0 0
B) Public Company Accounting Oversight Board
0 0 0 0
C) American Institute of Certified Public Accountants
0 0 0 0 0
D) Securities and Exchange Commission 0 0 0 0
Answer: B 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP
AACSB:0 0 Application0of0knowledge
3
Copyright © 2022 Pearson Education, Inc.
0 0 0 0 0
0 0 0
Chapter 1 The Financial Reporting Environment
0 0 0 0
1.1 Overview of Financial Reporting0 0 0
1) The financial reporting process generates three basic financial statements.
0 0 0 0 0 0 0 0 0
Answer: FALSE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
2) The demand for financial information is based on market participant demand.
0 0 0 0 0 0 0 0 0 0 0
Answer: TRUE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
3) Managers of economic entities are best considered to be users of financial information.
0 0 0 0 0 0 0 0 0 0 0 0 0
Answer: FALSE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
4) Managers of economic entities are best considered to be preparers of financial information.
0 0 0 0 0 0 0 0 0 0 0 0 0
Answer: TRUE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly traded c
0 0 0 0 0 0 0 0 0 0 0 0
ompanies.
Answer: TRUE
0 0
Diff:02
Objective:0 1.10IFRS/GAA
P:0 GAAP
AACSB:0 0 Application0of0knowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded companies.
0 0 0 0 0 0 0 0 0 0 0 0 0
Answer: FALSE
0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP
AACSB:0 0 Application0of0knowledge
1
Copyright © 2022 Pearson Education, Inc.
0 0 0 0 0
,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards and o
0 0 0 0 0 0 0 0 0 0 0 0
versees the audits of public companies in the United States.
0 0 0 0 0 0 0 0 0
Answer: FALSE 0 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP
AACSB:0 0 Application0of0knowledge
8) Financial accounting standards influence the behavior of managers and other internal users.
0 0 0 0 0 0 0 0 0 0 0 0
Answer: TRUE 0
Diff:02
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
9) Theories and procedures that evolve as a result of lobbying from various groups are examples of p
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
roactive factors within the legal, economic, political, and social environment.
0 0 0 0 0 0 0 0 0
Answer: FALSE 0 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
10) Financial information includes information that is not governed by rules set forth by the accounting s
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
tandard-setting bodies. 0
Answer: TRUE 0 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
11) What is the term that describes the process of identifying, measuring, and communicating financial i
0 0 0 0 0 0 0 0 0 0 0 0 0 0
nformation about an economic entity to various user groups?
0 0 0 0 0 0 0 0
A) financial reporting 0
B) accounting standard setting 0 0
C) financial statement 0
D) financial accounting 0
Answer: D
0 0
Diff:02
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
2
Copyright © 2022 Pearson Education, Inc.
0 0 0 0 0
, 12) Which element of financial accounting involves identifying the individuals who demand financial i
0 0 0 0 0 0 0 0 0 0 0 0
nformation?
A) financial information 0
B) economic entity 0
C) user groups
0
D) legal, economic, political, and social environment
0 0 0 0 0 0
Answer: C 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
13) Which of the following is not one of the four basic financial statements?
0 0 0 0 0 0 0 0 0 0 0 0
A) balance sheet 0
B) trial balance
0
C) cash flows statement
0 0
D) statement of comprehensive income 0 0 0 0
Answer: B 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
14) Which organization is responsible for promulgating U.S. GAAP?
0 0 0 0 0 0 0
A) Financial Accounting Standards Board
0 0 0
B) Public Company Accounting Oversight Board
0 0 0 0
C) International Accounting Standards Board 0 0 0
D) Securities and Exchange Commission 0 0 0 0
Answer: A 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP/IFRS
AACSB:0 0 Application0of0knowledge
15) Which organization is responsible for setting auditing standards and overseeing the audits of public c
0 0 0 0 0 0 0 0 0 0 0 0 0 0
ompanies in the United States?
0 0 0 0
A) Financial Accounting Standards Board
0 0 0
B) Public Company Accounting Oversight Board
0 0 0 0
C) American Institute of Certified Public Accountants
0 0 0 0 0
D) Securities and Exchange Commission 0 0 0 0
Answer: B 0
Diff:01
Objective:0 1.10IFRS/GAA
P:0 GAAP
AACSB:0 0 Application0of0knowledge
3
Copyright © 2022 Pearson Education, Inc.
0 0 0 0 0
