ACG 4101 EXAM 2 CHAPTER 5 7 FIU
REVIEW SHEET VERIFIED QUESTIONS AND
ACCURATE ANSWERS GRADED A+
⩥ The Sarbanes-Oxley Act establishes an oversight board for accounting
practices called _____..
Answer: Public Company Accounting Oversight Board (PCAOB)
⩥ What the public thinks accountants should do and what accountants
think they can do.
Answer: The expectations gap
⩥ What are the 5 financial reporting challenges?.
Answer: 1. Non-financial measurements
2. Forward-looking information
3. Soft assets
4. Timeliness
5. Understandability
⩥ What are the two sets of accounting rules accepted for international
use?.
Answer: 1. GAAP
,2. IFRS
⩥ Rules accepted for international use issued by the International
Accounting Standards Board (IASB).
Answer: International Financial Reporting Standards (IFRS)
⩥ The _____ and _____ formalized their commitment to the
convergence of GAAP and IFRS by issuing a memorandum of
understanding..
Answer: 1. FASB
2. IASB
⩥ Make their existing financial reporting standards fully compatible as
soon as practicable, and coordinate their future work programs to ensure
that once achieved, compatibility is maintained.
Answer: GAAP and IFRS
⩥ What are the 3 fundamental considerations the FASB must keep in
mind in its rule-making activities?.
Answer: 1. Improvement in financial reporting
2. Simplification of the accounting literature and the rule-making
process
3. International convergence
, ⩥ Enables the FASB to issue more useful and consistent
pronouncements over time, and a coherent set of standards should result.
Answer: A conceptual framework
⩥ Allows a way to more quickly solve new and emerging practical
problems by referring to an existing framework of basic theory.
Answer: A conceptual framework
⩥ The FASB has issued _____ Statements of Financial Accounting
Concepts that relate to financial reporting for business enterprises..
Answer: Seven
⩥ How many levels are there of the Conceptual Framework?.
Answer: Three
⩥ What is the "how" implementation level of the framework?.
Answer: The 3rd level
⩥ What is the "why" purpose of accounting level of the framework?.
Answer: The 1st level
⩥ What level of the framework is about Recognition, Measurement, and
Disclosure Concepts?.
REVIEW SHEET VERIFIED QUESTIONS AND
ACCURATE ANSWERS GRADED A+
⩥ The Sarbanes-Oxley Act establishes an oversight board for accounting
practices called _____..
Answer: Public Company Accounting Oversight Board (PCAOB)
⩥ What the public thinks accountants should do and what accountants
think they can do.
Answer: The expectations gap
⩥ What are the 5 financial reporting challenges?.
Answer: 1. Non-financial measurements
2. Forward-looking information
3. Soft assets
4. Timeliness
5. Understandability
⩥ What are the two sets of accounting rules accepted for international
use?.
Answer: 1. GAAP
,2. IFRS
⩥ Rules accepted for international use issued by the International
Accounting Standards Board (IASB).
Answer: International Financial Reporting Standards (IFRS)
⩥ The _____ and _____ formalized their commitment to the
convergence of GAAP and IFRS by issuing a memorandum of
understanding..
Answer: 1. FASB
2. IASB
⩥ Make their existing financial reporting standards fully compatible as
soon as practicable, and coordinate their future work programs to ensure
that once achieved, compatibility is maintained.
Answer: GAAP and IFRS
⩥ What are the 3 fundamental considerations the FASB must keep in
mind in its rule-making activities?.
Answer: 1. Improvement in financial reporting
2. Simplification of the accounting literature and the rule-making
process
3. International convergence
, ⩥ Enables the FASB to issue more useful and consistent
pronouncements over time, and a coherent set of standards should result.
Answer: A conceptual framework
⩥ Allows a way to more quickly solve new and emerging practical
problems by referring to an existing framework of basic theory.
Answer: A conceptual framework
⩥ The FASB has issued _____ Statements of Financial Accounting
Concepts that relate to financial reporting for business enterprises..
Answer: Seven
⩥ How many levels are there of the Conceptual Framework?.
Answer: Three
⩥ What is the "how" implementation level of the framework?.
Answer: The 3rd level
⩥ What is the "why" purpose of accounting level of the framework?.
Answer: The 1st level
⩥ What level of the framework is about Recognition, Measurement, and
Disclosure Concepts?.
