TEST BANK For Gordon, Intermediate Accounting 3rd Edition, Verified Chapters 1 - 22, Complete Newest Version

,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 Reporting x@ x@ x@




1) The financial reporting process generates three basic financial stateme
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nts. Answer: FALSE
x@ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

2) The demand for financial information is based on market participant dem
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@


and. Answer: TRUE
x@ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

3) Managers of economic entities are best considered to be users of financial inform
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ation. Answer: FALSE
x@ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

4) Managers of economic entities are best considered to be preparers of financial inform
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@


ation. Answer: TRUE
x@ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly tr
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@


aded companies.
x@


Answer: TRUE x @ x @


Diff:x@2
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP
AACSB:x @ x @ Applicationx@ofx@knowledge

6) The FASB gives the SEC authority to regulate accounting for publicly traded comp
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anies. Answer: FALSE
x@ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP
AACSB:x @ x @ Applicationx@ofx@knowledge




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,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards
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and oversees the audits of public companies in the United States.
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Answer: FALSE x @ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP
AACSB:x @ x @ Applicationx@ofx@knowledge

8) Financial accounting standards influence the behavior of managers and other internal
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@


users. Answer: TRUE
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Diff:x@2
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

9) Theories and procedures that evolve as a result of lobbying from various groups are exam
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ples of proactive factors within the legal, economic, political, and social environment.
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@


Answer: FALSE x @ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

10) Financial information includes information that is not governed by rules set forth by the acco
x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@ x@


unting standard-setting bodies.
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Answer: TRUE x @ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

11) What is the term that describes the process of identifying, measuring, and communicating fin
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ancial information about an economic entity to various user groups?
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A) financial reporting x@


B) accounting standard setting x@ x@


C) financial statement x@


D) financial accountin x@


g Answer: D
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Diff:x@2
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge




2
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x@ x@ x@ x@ x@

nc.

, 12) Which element of financial accounting involves identifying the individuals who demand fina
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ncial information?
x@


A) financial information x@


B) economic entity x@


C) user groups
x@


D) legal, economic, political, and social environme
x@ x@ x@ x@ x@


nt Answer: C
x@ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

13) Which of the following is not one of the four basic financial statements?
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A) balance sheet x@


B) trial balance
x@


C) cash flows statement
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D) statement of comprehensive incomx@ x@ x@


e Answer: B
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Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

14) Which organization is responsible for promulgating U.S. GAAP?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) International Accounting Standards Board x@ x@ x@


D) Securities and Exchange Commissio
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n Answer: A
x@ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP/IFRS
AACSB:x @ x @ Applicationx@ofx@knowledge

15) Which organization is responsible for setting auditing standards and overseeing the audits of
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public companies in the United States?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) American Institute of Certified Public Accountants
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D) Securities and Exchange Commissio
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n Answer: B
x@ x @


Diff:x@1
Objective:x @ 1.1x@IFRS/GA
AP:x @ GAAP
AACSB:x @ x @ Applicationx@ofx@knowledge




3
Copyright © 2022 Pearson Education, I
x@ x@ x@ x@ x@

nc.