, 1
Copyright © 2022 Pearson Education, Inc.
x$ x$ x$ x$ x$
,Intermediate Accounting, 4e (Gordon/Raedy/Sannella) x$ x$ x$
Chapter 1 The Financial Reporting Environment
x$ x$ x$ x$
1.1 Overview of Financial Reporting x$ x$ x$
1) The financial reporting process generates three basic financial statements
x$ x$ x$ x$ x$ x$ x$ x$
. Answer: FALSE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS
x $
AACSB: Application of knowledge
x $ x $ x$ x$
2) The demand for financial information is based on market participant demand
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: TRUE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS
x $
AACSB: Application of knowledge
x $ x $ x$ x$
3) Managers of economic entities are best considered to be users of financial information
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: FALSE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS
x $
AACSB: Application of knowledge
x $ x $ x$ x$
4) Managers of economic entities are best considered to be preparers of financial information
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: TRUE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS
x $
AACSB: Application of knowledge
x $ x $ x$ x$
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly trade
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
d companies.
x$
Answer: TRUE x $ x $
Diff: 2 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP x $
AACSB: Application of knowledge
x $ x $ x$ x$
6) The FASB gives the SEC authority to regulate accounting for publicly traded companies
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: FALSE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP x $
AACSB: Application of knowledge
x $ x $ x$ x$
2
Copyright © 2022 Pearson Education, Inc.
x$ x$ x$ x$ x$
, 7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards an
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
d oversees the audits of public companies in the United States.
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
Answer: FALSE x $ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP x $
AACSB: Application of knowledge
x $ x $ x$ x$
8) Financial accounting standards influence the behavior of managers and other internal users
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: TRUE
x$ x $
Diff: 2 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS x $
AACSB: Application of knowledge
x $ x $ x$ x$
9) Theories and procedures that evolve as a result of lobbying from various groups are examples o
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
f proactive factors within the legal, economic, political, and social environment.
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
Answer: FALSE x $ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS x $
AACSB: Application of knowledge
x $ x $ x$ x$
10) Financial information includes information that is not governed by rules set forth by the accountin
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
g standard-setting bodies.
x$ x$
Answer: TRUE x $ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS x $
AACSB: Application of knowledge
x $ x $ x$ x$
11) What is the term that describes the process of identifying, measuring, and communicating financia
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
l information about an economic entity to various user groups?
x$ x$ x$ x$ x$ x$ x$ x$ x$
A) financial reporting x$
B) accounting standard setting x$ x$
C) financial statement x$
D) financial accounting x$
Answer: D
x$ x $
Diff: 2 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS x $
AACSB: Application of knowledge
x $ x $ x$ x$
3
Copyright © 2022 Pearson Education, Inc.
x$ x$ x$ x$ x$
Copyright © 2022 Pearson Education, Inc.
x$ x$ x$ x$ x$
,Intermediate Accounting, 4e (Gordon/Raedy/Sannella) x$ x$ x$
Chapter 1 The Financial Reporting Environment
x$ x$ x$ x$
1.1 Overview of Financial Reporting x$ x$ x$
1) The financial reporting process generates three basic financial statements
x$ x$ x$ x$ x$ x$ x$ x$
. Answer: FALSE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS
x $
AACSB: Application of knowledge
x $ x $ x$ x$
2) The demand for financial information is based on market participant demand
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: TRUE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS
x $
AACSB: Application of knowledge
x $ x $ x$ x$
3) Managers of economic entities are best considered to be users of financial information
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: FALSE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS
x $
AACSB: Application of knowledge
x $ x $ x$ x$
4) Managers of economic entities are best considered to be preparers of financial information
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: TRUE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS
x $
AACSB: Application of knowledge
x $ x $ x$ x$
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly trade
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
d companies.
x$
Answer: TRUE x $ x $
Diff: 2 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP x $
AACSB: Application of knowledge
x $ x $ x$ x$
6) The FASB gives the SEC authority to regulate accounting for publicly traded companies
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: FALSE
x$ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP x $
AACSB: Application of knowledge
x $ x $ x$ x$
2
Copyright © 2022 Pearson Education, Inc.
x$ x$ x$ x$ x$
, 7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards an
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
d oversees the audits of public companies in the United States.
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
Answer: FALSE x $ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP x $
AACSB: Application of knowledge
x $ x $ x$ x$
8) Financial accounting standards influence the behavior of managers and other internal users
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
. Answer: TRUE
x$ x $
Diff: 2 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS x $
AACSB: Application of knowledge
x $ x $ x$ x$
9) Theories and procedures that evolve as a result of lobbying from various groups are examples o
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
f proactive factors within the legal, economic, political, and social environment.
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
Answer: FALSE x $ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS x $
AACSB: Application of knowledge
x $ x $ x$ x$
10) Financial information includes information that is not governed by rules set forth by the accountin
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
g standard-setting bodies.
x$ x$
Answer: TRUE x $ x $
Diff: 1 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS x $
AACSB: Application of knowledge
x $ x $ x$ x$
11) What is the term that describes the process of identifying, measuring, and communicating financia
x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$ x$
l information about an economic entity to various user groups?
x$ x$ x$ x$ x$ x$ x$ x$ x$
A) financial reporting x$
B) accounting standard setting x$ x$
C) financial statement x$
D) financial accounting x$
Answer: D
x$ x $
Diff: 2 x$
Objective: 1.1 IFRS/GA x $ x$
AP: GAAP/IFRS x $
AACSB: Application of knowledge
x $ x $ x$ x$
3
Copyright © 2022 Pearson Education, Inc.
x$ x$ x$ x$ x$
