Intermediate Accounting - Test 1 - Multiple
Choice UPDATED Exam Questions and
CORRECT Answers ONLY
Financial - Correct Answer- Financial statements used both externally and internally
Managerial - Correct Answer- For management to plan, control, evaluate
Objective of Financial Reporting - Correct Answer- Provide financial info 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 - Correct Answer- most useful at least cost
entity perspective - Correct Answer- company is separate and distinct form owners
decision usefulness - Correct Answer- helps interested parties make good decisions
GAAP - Correct Answer- common set of standards and procedures
SEC - Correct Answer- federal agency to administer the Securities Acts, requires GAAP to be
followed, but gets involved with standard setting by influencing it and sometimes setting its
own
AICPA - Correct Answer- national professional organization, through out the years has set
standards and influenced the profession, develops and grades the CPA exam. (Public
Company Accounting Oversight Board—set auditing stds instead of AICPA)
FASB - Correct Answer- the main current rule-making body for business organizations, uses
due process system - pg 1-10 organizational structure. Accounting Standards Updates
(ASU's) and Statements of Financial Accounting concepts-not GAAP
Choice UPDATED Exam Questions and
CORRECT Answers ONLY
Financial - Correct Answer- Financial statements used both externally and internally
Managerial - Correct Answer- For management to plan, control, evaluate
Objective of Financial Reporting - Correct Answer- Provide financial info 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 - Correct Answer- most useful at least cost
entity perspective - Correct Answer- company is separate and distinct form owners
decision usefulness - Correct Answer- helps interested parties make good decisions
GAAP - Correct Answer- common set of standards and procedures
SEC - Correct Answer- federal agency to administer the Securities Acts, requires GAAP to be
followed, but gets involved with standard setting by influencing it and sometimes setting its
own
AICPA - Correct Answer- national professional organization, through out the years has set
standards and influenced the profession, develops and grades the CPA exam. (Public
Company Accounting Oversight Board—set auditing stds instead of AICPA)
FASB - Correct Answer- the main current rule-making body for business organizations, uses
due process system - pg 1-10 organizational structure. Accounting Standards Updates
(ASU's) and Statements of Financial Accounting concepts-not GAAP
