Intermediate Accounting Exam 1 Study Guide With Latest Solutions

Intermediate Accounting Exam 1 Study Guide With Latest Solutions GAAP (Generally Accepted Accounting Principles) - answerA common set of accounting standards and procedures are called IRFS includes both International Reporting Standards and International Accounting Standards - answerTRUE International Financial Reporting Standards preceded International Accounting Standards - answerTRUE The standard-setting structure used by the International Accounting Standards Board is very similar to that used by the Financial Accounting Standards Board. - answerTRUE The rules-based standards of IFRS are more detailed than the simpler, principles-based standards of GAAP - answerFALSE Accounting principles are "generally accepted" only when I. an authoritative accounting rule-making body has established it in an official pronouncement II. a given practice has been accepted as appropriate because of its universal application. - answer1 AND 2 The role of the Securities and Exchange Commission (SEC) in the formulation of accounting standards can be best described as - answerVARIED - the SEC relies on the FASB to develop standards but gives advice and recommendations to the private sector Which of the following was established by the federal government to help develop and standardize financial information presented to stockholders? - answerSecurities and Exchange Commission (SEC) The first step taken in the establishment of a typical FASB statement is - answertopics are identified and placed on the board's agenda Financial Accounting Concepts are a major type of pronouncement issued by the FASB (Financial Accounting Standards Board) - answerTRUE Which of the following is NOT considered a GAAP document? - answerStatement of Financial Accounting Concepts Financial Accounting Standards Board Accounting Standards Codification - answer1. does not create a new GAAP 2. simplifies user access to all authoritative US generally accepted accounting principles 3. eliminates nonessential information The European Union requires publicly traded member country companies to use IFRS - answerTRUE International Financial Reporting Standards (IFRS) are issued by - answerIASB (International Accounting Standards Board) IFRS is more "principles-based," not "rules-based" in its approach to standards than is US GAAP - answerTRUE The objectives of general purpose financial reporting adopts an entity perspective, which means that - answercompanies are viewed as separate and distinct from their owners Which of the following would result if there was not a set of generally accepted and universally practiced accounting standards? - answerIt would be almost impossible to prepare statements that could be compared. Each company would have to develop its own standards, readers of financial statements would have to familiarize themselves with every company's peculiar accounting and reporting practices The Financial Accounting Standards Advisory Council (FASAC) consults with the FASB on major policy and technical issues and helps select task force members. - answerTRUE Which group selects members of the FASB? - answerFAF (Financial Accounting Foundation) The organization that provides implementation guidance within the framework of the Codification to reduce diversity in practice on a tim