Test Bank for Intermediate Accounting, Thirteenth Edition by Donald E. Kieso (Author), Jerry J. Weygandt (2025)

, CHAPTER 1 .



FINANCIAL .ACCOUNTING .AND
. ACCOUNTING .STANDARDS


IFRS .questions .are .available .at .the .end .of .this .chapter.


MULTIPLE .CHOICE—Conceptual
21. General-purpose .financial .statements .are .the .product .of
a. financial .accounting.
b. managerial .accounting.
c. both .financial .and .managerial .accounting.
d. neither .financial .nor .managerial .accounting.

22. Users .of .financial .reports .include .all .of .the .following .except
a. creditors.
b. government .agencies.
c. unions.
d. All .of .these .are .users.

23. The .financial .statements .most .frequently .provided .include .all .of .the .following .except .the
a. balance .sheet.
b. income .statement.
c. statement .of .cash .flows.
d. statement .of .retained .earnings.

24. The .information .provided .by .financial .reporting .pertains .to
a. individual .business .enterprises, .rather .than .to .industries .or .an .economy .as .a .whole
.or .to .members .of .society .as .consumers.
b. business .industries, .rather .than .to .individual .enterprises .or .an .economy .as .a .whole
.or .to .members .of .society .as .consumers.
c. individual .business .enterprises, .industries, .and .an .economy .as .a .whole, .rather .than
.to .members .of .society .as .consumers.
d. an . economy . as . a . whole . and . to . members . of . society . as . consumers, . rather
. than . to .individual .enterprises .or .industries.


25. All . the . following . are . differences . between . financial . and . managerial . accounting
. in . how .accounting .information .is .used .except .to
a. plan .and .control .company's .operations.
b. decide .whether .to .invest .in .the .company.
c. evaluate .borrowing .capacity .to .determine .the .extent .of .a .loan .to .grant.
d. All .the .above.

26. Which .of .the .following .represents .a .form .of .communication .through .financial .reporting
.but .not .through .financial .statements?
a. Balance .sheet.
b. President's .letter.
c. Income .statement.

,
, 1-2 Test Bank for Intermediate Accounting, Thirteenth Edition

d. Notes .to .financial .statements.
P
27. The .process .of .identifying, .measuring, .analyzing, .and .communicating .financial
.information .needed .by .management .to .plan, .evaluate, .and .control .an .organization’s
.operations .is .called
a. financial .accounting.
b. managerial .accounting.
c. tax .accounting.
d. auditing.

28. How .does .accounting .help .the .capital .allocation .process .attract .investment .capital?
a. Provides .timely, .relevant .information.
b. Encourages .innovation.
c. Promotes .productivity.
d. a .and .b .above.

29. Whether .a .business .is .successful .and .thrives .is .determined .by
a. markets.
b. free .enterprise.
c. competition.
d. all .of .these.

30. An .effective .capital .allocation .process
a. promotes .productivity.
b. encourages .innovation.
c. provides .an .efficient .market .for .buying .and .selling .securities.
d. all .of .these.

31. Financial .statements .in .the .early .2000s .provide .information .related .to
a. nonfinancial .measurements.
b. forward-looking .data.
c. hard .assets .(inventory .and .plant .assets).
d. none .of .these.

32. Which .of .the .following .is .not .a .major .challenge .facing .the .accounting .profession?
a. Nonfinancial .measurements.
b. Timeliness.
c. Accounting .for .hard .assets.
d. Forward-looking .information.

33. What .is .a .major .objective .of .financial .reporting?
a. Provide .information .that .is .useful .to .management .in .making .decisions.
b. Provide .information .that .clearly .portray .nonfinancial .transactions.
c. Provide . information . that . is . useful . to . assess . the . amounts, . timing, . and
. uncertainty . of .perspective .cash .receipts.
d. Provide .information .that .excludes .claims .to .the .resources.

34. What .is .a .major .objective .of .financial .reporting?
a. Provide .information .that .is .useful .to .the .Internal .Revenue .Service .in .determining
.the . amount .of .federal .income .taxes .payable.
b. Provide .information .that .is .useful .in .assessing .the .amounts .and .timing .of .revenue.
c. Provide .information .that .is .comprehensible .only .by .sophisticated .investors.
d. Provide .information .that .clearly .portrays .the .economic .resources .of .an .enterprise.