Test Bank for Intermediate Accounting, 19th Edition by Donald Kieso, Jerry Weygandt, Chapter 1-24 | All Chapters

TEST BANK
Intermediate Accounting, 19th Edition

by Donald Kieso, Jerry Weygandt, Terry Warfield
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, TABLE OF CONTENT

CHAPTER 1 The Environment and Conceptual Framework of Financial Reporting
CHAPTER 2 The Accounting Information System
CHAPTER 3 Income Statement, Related Information, and Revenue Recognition
CHAPTER 4 Balance Sheet and Statement of Cash Flows
CHAPTER 5 Accounting and the Time Value of Money
CHAPTER 6 Cash and Receivables
CHAPTER 7 Valuation of Inventories: A Cost-Basis Approach
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CHAPTER 8 Inventories: Additional Valuation Issues
CHAPTER 9 Acquisition and Disposition of Property, Plant, and Equipment
CHAPTER 10 Depreciation, Impairments, and Depletion
CHAPTER 11 Intangible Assets
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CHAPTER 12 Current Liabilities and Contingencies
CHAPTER 13 Long-Term Liabilities
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CHAPTER 14 Stockholders’ Equity
CHAPTER 15 Dilutive Securities and Earnings per Share
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CHAPTER 16 Investments
CHAPTER 17 Revenue Recognition
CHAPTER 18 Accounting for Income Taxes
CHAPTER 19 Accounting for Pensions and Postretirement Benefits
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CHAPTER 20 Accounting for Leases
CHAPTER 21 Accounting Changes and Error Analysis
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CHAPTER 22 Statement of Cash Flows
CHAPTER 23 Full Disclosure in Financial Reporting
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, CHAPTER 1
THE ENVIRONMENT AND CONCEPTUAL FRAMEWORK
OF FINANCIAL REPORTING
IFRS questions are available at the end of this chapter.


TRUE-FALSE—Conceptual
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1. Financial statements are the principal means through which a company communicates its
financial information to those outside it.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None

2. Users of financial reports of a company use the information provided by these reports to
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make capital allocation decisions.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None
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3. An effective process of capital allocation provides an efficient market for buying and selling
securities and obtaining and granting credit.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
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Control: Financial Statement Preparation, IFRS: None

4. Investors are interested in financial reporting because it provides information that is useful
for making decisions.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None

5. Users of financial accounting statements have both coinciding and conflicting needs for
information of various types.
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Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None

6. Although the FASB has developed a conceptual framework, no Statements of Financial
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Accounting Concepts have been issued to date.
Ans: F, LO: 1, Bloom: K, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None

7. The passage of a new FASB Accounting Standards Update requires the support of five of
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the seven board members.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None

8. Statements of Financial Accounting Concepts set forth fundamental objectives and
concepts that are used by the FASB in developing future standards of financial accounting
and reporting.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None

9. The FASB’s Codification creates a new set of GAAP.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None

, 1-2 Test Bank for Intermediate Accounting, 19th Edition

10. The objective of financial reporting is to report the plans made by a company to improve the
productivity of its employees.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None

11. A soundly developed conceptual framework enables the FASB to issue more useful and
consistent pronouncements over time.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None
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12. A conceptual framework is a coherent system of concepts that flow from an objective.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None

13. The first level of the conceptual framework identifies the recognition, measurement, and
disclosure concepts used in establishing accounting standards.
Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
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Control: Financial Statement Analysis, IFRS: None


14. The objective of financial reporting serves as the foundation of the conceptual framework.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
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Control: Financial Statement Analysis, IFRS: None

15. Users of financial statements are assumed to need no knowledge of business and financial
accounting matters to understand the information contained in financial statements.
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Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None

16. Relevance and faithful representation are the two fundamental qualities that make
accounting information useful for decision-making.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None
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17. The idea of consistency does not mean that companies cannot switch from one accounting
method to another.
Ans: T, LO: 2, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None
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18. Timeliness and neutrality are two ingredients of relevance.
Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None

19. Verifiability and predictive value are two ingredients of faithful representation.
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Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Analysis, IFRS: None

20. Revenues, gains, and distributions to owners all increase equity.
Ans: F, LO: 2, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation,
AICPA PC: None, IMA: Reporting & Control: Financial Statement Analysis, IFRS: None

21. Comprehensive income includes all changes in equity during a period except those
resulting from investments by owners and distributions to owners.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA
PC: None, IMA: Reporting & Control: Financial Statement Analysis, IFRS: None