Test Bank For Intermediate Accounting IFRS Edition 4th Edition by Donald Kieso, Jerry Weygandt, Terry Warfield. Isbn. 9781119607519

TEST BANK Intermediate Accounting IFRS Edition 4th Edition

Chapter 01: Financial Reporting and Accounting Standards
TRUE-FALSE —Conceptual
1. Financial statements are the principal means through which financial information is
communicated to those outside an enterprise.
Ans: T
LO: 1.1
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

2. Capital markets are increasingly integrated and companies have greater flexibility in
deciding where to raise capital.
Ans: T
LO: 1.1
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

3. The major financial statements used under International Financial Reporting Standards
(IFRS) include the statement of changes in financial position and the statement of
stockholders’ equity.
Ans: F
LO: 1.1
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

4. General-purpose financial statements are not considered cost-effective because, while they
provide useful information, the cost to provide the information is quite high.
Ans: F
LO: 1.2
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking

,AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

5. Investors and creditors are considered the primary user group of general-purpose financial
reporting.
Ans: T
LO: 1.2
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

6. An effective process of capital allocation promotes productivity and provides an efficient
market for buying and selling securities and obtaining and granting credit.
Ans: T
LO: 1.2
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

7. The emphasis on “assessing cash flow prospects” means that the cash basis is preferred
over the accrual basis of accounting.
Ans: F
LO: 1.2
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

8. While objectives for financial reporting exist on an informal basis, no formal objectives have
been adopted.
Ans: F
LO: 1.2
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking

,AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

9. One weakness of accrual accounting is that it does not provide a good indication of the
enterprise's present and continuing ability to generate favorable cash flows.
Ans: F
LO: 1.2
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

10. The passage of a new International Financial Reporting Standard requires the support of
ten of the thirteen board members.
Ans: F
LO: 1.3
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

11. International Financial Reporting Standards preceded International Accounting Standards.
Ans: F
LO: 1.3
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

12. The standard-setting structure includes a Monitoring Board whose purpose is to provide
advice and counsel to the IASB on major policies and technical issues.
Ans: F
LO: 1.3
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking

, AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

13. The overriding requirement of IFRS is that financial statements provide an error-free and
comprehensive presentation of a company’s financial position.
Ans: F
LO: 1.3
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

14. The IFRS Foundation appoints members, reviews effectiveness, and helps in the
fundraising efforts of the IASB, IFRS Advisory Council, and IFRS Interpretations
Committee.
Ans: T
LO: 1.3
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

15. International Accounting Standards are no longer considered applicable because they have
been replaced by International Financial Reporting Standards.
Ans: F
LO: 1.3
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None

16. The IASB has a regulatory mandate that is enforced by the European Union member
countries.
Ans: F
LO: 1.3
Bloom: K
Difficulty: Easy
Min: 1
AACSB: Analytic