,Chapter 1
Multiple Choice:
1. Which of the following bodies has the ultimate authority to issue accounting pronouncements in
the United States?
a. Securities and Exchange Commission
b. Financial Accounting Standards Board
c. International Accounting Standards Committee
d. Internal Revenue Service
Answer a
2. What historical evidence of the business operations of the private estate of Apollonius was
discovered early inthe20th century?
a. The Iliad
b. Plato's Republic
c. The Zenon papyri
d. Pacioli’s work, Summa de Arithmetica Geometria Proportioni et Proportionalita,
Answer c
3. Who has been given credit or developing the double-entry system of bookkeeping?
a. Francis Wheat
b. Fra Luca Pacioli
c. A. C. Littleton
d. William Paton
Answer b
4. Which organization was responsible for issuing Accounting Research Bulletins?
a. The Committee on Accounting Procedure
b. The Accounting Principles board
c. The Financial Accounting Standards Board
d. The Securities and Exchange Commission
Answer a
5. Which of the following pronouncements were issued by the Accounting Principles Board?
a. Accounting Research Bulletins
b. APB Opinions
c. Statements of Financial Accounting Concepts
d. Accounting Standards Updates
2
,Answer b
6. Which of the following was not a criticism of the development of accounting standards by the
Accounting Principles Board?
a. The independence of the members of the APB. The individuals serving on the board had full-
time responsibilities elsewhere that might influence their views of certain issues.
b. The structure of the board. The largest eight public accounting firms (at that time) were
automatically awarded one member, and there were usually five or six other public
accountants on the APB.
c. Harmonization. The accounting standards developed were dissimilar to those developed by
the International Accounting Standards Committee.
d. Response time. The emerging accounting problems were not being investigated and solved
quickly enough by the part-time members.
Answer c
7. Which of the following is the professional organization of university accounting professors?
a. American Accounting Association
b. American Institute of Certified Public Accountants
c. American Institute of Accountants
d. Financial Executives Institute
Answer a
8. What controversy originally highlighted the need for standard setting groups to have more
authority?
a. Accounting for stock options
b. Accounting for derivatives
c. Accounting for marketable securities
d. Accounting for the investment tax credit
Answer d
9. Which of the following committees recommended abolishing the Accounting Principles Board
and replacing it with the Financial Accounting Board?
a. Wheat
b. Cohen
c. Trueblood
d. Anderson
Answer a
10. Which of the following is a public sector accounting standard setter?
3
, a. FASB
b. SEC
c. APB
d. CAP
Answer b
11. Which of the following types of pronouncements now establishes generally accepted accounting
principles?
a. Statements of Concepts
b. Statements of Financial Accounting Standards
c. APB Opinions
d. Accounting Standards Updates
Answer d
12. Which of the following types of pronouncements are intended to establish the objectives and
concepts that the FASB will use in developing standards of financial accounting and reporting?
a. Statements of Concepts
b. Statements of Financial Accounting Standards
c. APB Opinions
d. Accounting Standards Updates
Answer a
13. What is the purpose of Emerging Issues Task Force?
a. Provide interpretation of existing standards.
b. Provide timely guidance on select issues.
c. Provide implementation guidance within the Codification framework to reduce diversity in
practice on a timely basis.
d. Provide interpretive guidance
Answer c
14. Which of the following is not a consequence of the standards overload problem to small
businesses?
a. If a small business omits a GAAP requirement from audited financial statements, a qualified
or adverse opinion may be rendered.
b. Small businesses do not need to keep financial records
c. The cost of complying with GAAP requirements may cause a small business to forgo the
development of other, more relevant information.
4
Multiple Choice:
1. Which of the following bodies has the ultimate authority to issue accounting pronouncements in
the United States?
a. Securities and Exchange Commission
b. Financial Accounting Standards Board
c. International Accounting Standards Committee
d. Internal Revenue Service
Answer a
2. What historical evidence of the business operations of the private estate of Apollonius was
discovered early inthe20th century?
a. The Iliad
b. Plato's Republic
c. The Zenon papyri
d. Pacioli’s work, Summa de Arithmetica Geometria Proportioni et Proportionalita,
Answer c
3. Who has been given credit or developing the double-entry system of bookkeeping?
a. Francis Wheat
b. Fra Luca Pacioli
c. A. C. Littleton
d. William Paton
Answer b
4. Which organization was responsible for issuing Accounting Research Bulletins?
a. The Committee on Accounting Procedure
b. The Accounting Principles board
c. The Financial Accounting Standards Board
d. The Securities and Exchange Commission
Answer a
5. Which of the following pronouncements were issued by the Accounting Principles Board?
a. Accounting Research Bulletins
b. APB Opinions
c. Statements of Financial Accounting Concepts
d. Accounting Standards Updates
2
,Answer b
6. Which of the following was not a criticism of the development of accounting standards by the
Accounting Principles Board?
a. The independence of the members of the APB. The individuals serving on the board had full-
time responsibilities elsewhere that might influence their views of certain issues.
b. The structure of the board. The largest eight public accounting firms (at that time) were
automatically awarded one member, and there were usually five or six other public
accountants on the APB.
c. Harmonization. The accounting standards developed were dissimilar to those developed by
the International Accounting Standards Committee.
d. Response time. The emerging accounting problems were not being investigated and solved
quickly enough by the part-time members.
Answer c
7. Which of the following is the professional organization of university accounting professors?
a. American Accounting Association
b. American Institute of Certified Public Accountants
c. American Institute of Accountants
d. Financial Executives Institute
Answer a
8. What controversy originally highlighted the need for standard setting groups to have more
authority?
a. Accounting for stock options
b. Accounting for derivatives
c. Accounting for marketable securities
d. Accounting for the investment tax credit
Answer d
9. Which of the following committees recommended abolishing the Accounting Principles Board
and replacing it with the Financial Accounting Board?
a. Wheat
b. Cohen
c. Trueblood
d. Anderson
Answer a
10. Which of the following is a public sector accounting standard setter?
3
, a. FASB
b. SEC
c. APB
d. CAP
Answer b
11. Which of the following types of pronouncements now establishes generally accepted accounting
principles?
a. Statements of Concepts
b. Statements of Financial Accounting Standards
c. APB Opinions
d. Accounting Standards Updates
Answer d
12. Which of the following types of pronouncements are intended to establish the objectives and
concepts that the FASB will use in developing standards of financial accounting and reporting?
a. Statements of Concepts
b. Statements of Financial Accounting Standards
c. APB Opinions
d. Accounting Standards Updates
Answer a
13. What is the purpose of Emerging Issues Task Force?
a. Provide interpretation of existing standards.
b. Provide timely guidance on select issues.
c. Provide implementation guidance within the Codification framework to reduce diversity in
practice on a timely basis.
d. Provide interpretive guidance
Answer c
14. Which of the following is not a consequence of the standards overload problem to small
businesses?
a. If a small business omits a GAAP requirement from audited financial statements, a qualified
or adverse opinion may be rendered.
b. Small businesses do not need to keep financial records
c. The cost of complying with GAAP requirements may cause a small business to forgo the
development of other, more relevant information.
4
