Intermediate Accounting Wiley 18th Edition CH 1 Exam study guide
COMPLETE EXAM Questions and Answers (Verified Answers) (Latest
Update 2026) UPDATE!!
What does GAAP stand for? - (ANSWER)Generally Accepted Accounting Principles
What does SEC stand for? - (ANSWER)Securities and Exchange Commission
What does FASB stand for? - (ANSWER)Financial Accounting Standards Board
How is the SEC involved in developing accounting standards? - (ANSWER)-It can reject standards
proposed by the private sector
-Prod the private sector to take quicker action in developing standards
-Communicate problems to FASB, respond to FASB exposure drafts, and give advice to FASB
What does FAF stand for? - (ANSWER)Financial Accounting Foundation
What does FASAC stand for? - (ANSWER)Financial Accounting Standards Advisory Council
How does the SEC regulate companies? - (ANSWER)It assesses publically traded companies' financial
statements and can issue a stop order if companies do not comply
What is a stop order? - (ANSWER)An order by the SEC that prevents a company from issuing or trading
securities
What does the FAF do? - (ANSWER)Selects members of the FASB and its advisory councils and exercises
general oversight
What does FASB do? - (ANSWER)Sets accounting standards in the U.S.
, Intermediate Accounting Wiley 18th Edition CH 1 Exam study guide
COMPLETE EXAM Questions and Answers (Verified Answers) (Latest
Update 2026) UPDATE!!
What does the FASAC do? - (ANSWER)It consults on major policy issues, technical issues, project
priorities, and selection and organization of task forces.
What is the FASB due process system? - (ANSWER)1. Topics are identified
2. research and analysis are conducted (preliminary views)
3. there is a public hearing on the proposed standard
4. Exposure draft is created
5. Accounting standards are updated.
What does AICPA stand for? - (ANSWER)American Institute of Certified Public Accountants
What does IASB stand for? - (ANSWER)International Accounting Standards Board (Similar to FASB but on
an international level)
What does the IASB do? - (ANSWER)Sets the International Financial Reporting Standards (IFRS)
-used in over 120 countries, similar to GAAP
What is the objective of financial reporting? - (ANSWER)To provide information about the reporting
entity that is useful to present and potential equity investors, lenders, and other creditors in making
decisions about providing resources to the entity.
What are the two fundamental qualities that make accounting information useful for decision-making? -
(ANSWER)Relevance and Faithful Representation
COMPLETE EXAM Questions and Answers (Verified Answers) (Latest
Update 2026) UPDATE!!
What does GAAP stand for? - (ANSWER)Generally Accepted Accounting Principles
What does SEC stand for? - (ANSWER)Securities and Exchange Commission
What does FASB stand for? - (ANSWER)Financial Accounting Standards Board
How is the SEC involved in developing accounting standards? - (ANSWER)-It can reject standards
proposed by the private sector
-Prod the private sector to take quicker action in developing standards
-Communicate problems to FASB, respond to FASB exposure drafts, and give advice to FASB
What does FAF stand for? - (ANSWER)Financial Accounting Foundation
What does FASAC stand for? - (ANSWER)Financial Accounting Standards Advisory Council
How does the SEC regulate companies? - (ANSWER)It assesses publically traded companies' financial
statements and can issue a stop order if companies do not comply
What is a stop order? - (ANSWER)An order by the SEC that prevents a company from issuing or trading
securities
What does the FAF do? - (ANSWER)Selects members of the FASB and its advisory councils and exercises
general oversight
What does FASB do? - (ANSWER)Sets accounting standards in the U.S.
, Intermediate Accounting Wiley 18th Edition CH 1 Exam study guide
COMPLETE EXAM Questions and Answers (Verified Answers) (Latest
Update 2026) UPDATE!!
What does the FASAC do? - (ANSWER)It consults on major policy issues, technical issues, project
priorities, and selection and organization of task forces.
What is the FASB due process system? - (ANSWER)1. Topics are identified
2. research and analysis are conducted (preliminary views)
3. there is a public hearing on the proposed standard
4. Exposure draft is created
5. Accounting standards are updated.
What does AICPA stand for? - (ANSWER)American Institute of Certified Public Accountants
What does IASB stand for? - (ANSWER)International Accounting Standards Board (Similar to FASB but on
an international level)
What does the IASB do? - (ANSWER)Sets the International Financial Reporting Standards (IFRS)
-used in over 120 countries, similar to GAAP
What is the objective of financial reporting? - (ANSWER)To provide information about the reporting
entity that is useful to present and potential equity investors, lenders, and other creditors in making
decisions about providing resources to the entity.
What are the two fundamental qualities that make accounting information useful for decision-making? -
(ANSWER)Relevance and Faithful Representation
