Accounting Quiz 1
Chapters 1–2 2026 | Study
Guide, Practice Questions,
Answers, Rationales &
Exam Review | Complete
Ethics Study Guide
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
, The objective of general-purpose financial reporting is to What is the objective of general-purpose financial reporting?
provide financial information about the reporting entity that
is useful to present and potential equity investors, lenders,
and other creditors in decisions about providing resources
to the entity.
General-Purpose financial statements are prepared What are "general-purpose financial statements?" Prepared primarily for?
primarily for external users. They provide financial
reporting information to a wide variety of users --
shareholders, creditors, suppliers, employees, and
regulators. General purpose financial statements provide
at the least cost the most useful information possible.
The objective of financial reporting identifies investors and What are "general-purpose financial statements?" Primary users are?
creditors as the PRIMARY users for general-purpose
financial statements. It places the most emphasis on
reporting to these capital provides.
As part of the objective of general-purpose financial
reporting an entity perspective is adopted.
The SEC(Securities and Exchange Commission) is a What does the SEC have the power to do with respect to companies falling within
federal agency and administers the Securities Exchange its jurisdiction?
Act of 1934. IT has broad powers to prescribe the
accounting practices and standards to be employed by
companies that fall within its jurisdiction(publicly held
companies/listed on a stock exchange - over 12,000
currently).
1. Committee on Accounting Procedure(CAP) issued 51 Who were the AICPA(American Institute of Certified Public Accountants)
Accounting Research Bulletins(ARBs) that narrowed the organizations that preceded the current FASB organization and what were the
wide range of alternative accounting practices then in names of the documents issued by each?
existence. However it was a problem by problem approach
and not a structured body of principles.
2. Accounting Principles Board(APB) mission was to
develop a framework and to research individual issues
before the AICPA issued pronouncements. They appointed
the Wheat Committee to deflect any government
interference. In 1973, it was replaced by the FASB.
1. Smaller membership(7 versus 18-21 on the APB) In what ways does the FASB differ from its immediate predecessor (the APB)?
2. Full Time remunerated membership(APB members were
unpaid and part-time/now paid big bucks)
3. Greater Autonomy (APB was a senior committee of the
AICPA)
4. Increased Independence(FASB members must sever all
ties with firms, companies, and institutions)
5. Broader representation(It is not necessary to be a CPA
to be a member of the FASB)
Due Process System gives interested persons ample What is meant by the "due process" system?
opportunity to make their views known.
1. Research What is the order of the primary steps for due process?
2. Discussion Paper
3. Exposure Draft
4. Standard
The passage of new FASB guidance in the form of an How many FASB members must support the passage of an Accounting Standards
Accounting Standards Update requires the support of 4 of Update?
the 7 board members.
Chapters 1–2 2026 | Study
Guide, Practice Questions,
Answers, Rationales &
Exam Review | Complete
Ethics Study Guide
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
, The objective of general-purpose financial reporting is to What is the objective of general-purpose financial reporting?
provide financial information about the reporting entity that
is useful to present and potential equity investors, lenders,
and other creditors in decisions about providing resources
to the entity.
General-Purpose financial statements are prepared What are "general-purpose financial statements?" Prepared primarily for?
primarily for external users. They provide financial
reporting information to a wide variety of users --
shareholders, creditors, suppliers, employees, and
regulators. General purpose financial statements provide
at the least cost the most useful information possible.
The objective of financial reporting identifies investors and What are "general-purpose financial statements?" Primary users are?
creditors as the PRIMARY users for general-purpose
financial statements. It places the most emphasis on
reporting to these capital provides.
As part of the objective of general-purpose financial
reporting an entity perspective is adopted.
The SEC(Securities and Exchange Commission) is a What does the SEC have the power to do with respect to companies falling within
federal agency and administers the Securities Exchange its jurisdiction?
Act of 1934. IT has broad powers to prescribe the
accounting practices and standards to be employed by
companies that fall within its jurisdiction(publicly held
companies/listed on a stock exchange - over 12,000
currently).
1. Committee on Accounting Procedure(CAP) issued 51 Who were the AICPA(American Institute of Certified Public Accountants)
Accounting Research Bulletins(ARBs) that narrowed the organizations that preceded the current FASB organization and what were the
wide range of alternative accounting practices then in names of the documents issued by each?
existence. However it was a problem by problem approach
and not a structured body of principles.
2. Accounting Principles Board(APB) mission was to
develop a framework and to research individual issues
before the AICPA issued pronouncements. They appointed
the Wheat Committee to deflect any government
interference. In 1973, it was replaced by the FASB.
1. Smaller membership(7 versus 18-21 on the APB) In what ways does the FASB differ from its immediate predecessor (the APB)?
2. Full Time remunerated membership(APB members were
unpaid and part-time/now paid big bucks)
3. Greater Autonomy (APB was a senior committee of the
AICPA)
4. Increased Independence(FASB members must sever all
ties with firms, companies, and institutions)
5. Broader representation(It is not necessary to be a CPA
to be a member of the FASB)
Due Process System gives interested persons ample What is meant by the "due process" system?
opportunity to make their views known.
1. Research What is the order of the primary steps for due process?
2. Discussion Paper
3. Exposure Draft
4. Standard
The passage of new FASB guidance in the form of an How many FASB members must support the passage of an Accounting Standards
Accounting Standards Update requires the support of 4 of Update?
the 7 board members.
