Test Bank - Intermediate Accounting, 18th Edition - Kieso (All Chapters 1 to 23 Covered)

TEST BANK
Intermediate Accounting, 18th Edition
by Kieso, Warfield Chapter 1 - 23 Complete

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1 The Environment and Conceptual Framework of Financial Reporting
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2 The Accounting Information System
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3 Income Statement, Related Information, and Revenue Recognition
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4 Balance Sheet and Statement of Cash Flows
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5 Accounting and the Time Value of Money
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6 Cash and Receivables
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7 Valuation of Inventories: A Cost-Basis Approach
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8 Inventories: Additional Valuation Issues
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9 Acquisition and Disposition of Property, Plant, and Equipment
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10 Depreciation, Impairments, and Depletion
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11 Intangible Assets
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12 Current Liabilities and Contingencies
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13 Long-Term Liabilities
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14 Stockholders’ Equity
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15 Dilutive Securities and Earnings per Share
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16 Investments
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17 Revenue Recognition
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18 Accounting for Income Taxes
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19 Accounting for Pensions and Postretirement Benefits
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20 Accounting for Leases
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21 Accounting Changes and Error Analysis
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22 Statement of Cash Flows
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23 Full Disclosure in Financial Reporting
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, CHAPTER 1 RT




THE ENVIRONMENT AND CONCEPTUAL FRAMEWORK OF FINANCI
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AL REPORTING RT




IFRS questions are available at the end of this chapter.
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TRUE-FALSE—Conceptual
1. Financial statements are the principal means through which a company communicates its financial inf
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ormation to those outside it. RT RT RT RT




Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
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inancial Statement Preparation, IFRS: None
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2. Users of financial reports of a company use the information provided by these reports to make
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capital allocation decisions. RT RT




Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fi
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nancial Statement Preparation, IFRS: None
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3. An effective process of capital allocation provides an efficient market for buying and selling securities a
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nd obtaining and granting credit.
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Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
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inancial Statement Preparation, IFRS: None
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4. Investors are interested in financial reporting because it provides information that is useful for making d
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ecisions.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fi
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nancial Statement Preparation, IFRS: None
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5. Users of financial accounting statements have both coinciding and conflicting needs for infor
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mation of various types. RT RT RT




Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fi
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nancial Statement Preparation, IFRS: None
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6. Although the FASB has developed a conceptual framework, no Statements of Financial Accounting Con
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cepts have been issued to date. RT RT RT RT RT




Ans: F, LO: 1, Bloom: K, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Financial
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Statement Analysis, IFRS: None
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7. The passage of a new FASB Accounting Standards Update requires the support of five of the seven boar
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d members.
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Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
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inancial Statement Preparation, IFRS: None
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8. Statements of Financial Accounting Concepts set forth fundamental objectives and concepts that are
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used by the FASB in developing future standards of financial accounting and reporting.
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Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fi
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nancial Statement Analysis, IFRS: NoneRT RT RT RT




9. The FASB’s Codification creates a new set of GAAP.
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Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: F
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inancial Statement Analysis, IFRS: NoneRT RT RT RT

, 1-2
RT RT Test Bank for Intermediate Accounting, Eighteenth Edition
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10. The objective of financial reporting is to report the plans made by a company to improve the productivity
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of its employees.
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Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
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ancial Statement Preparation, IFRS: None RT RT RT RT




11. A soundly developed conceptual framework enables the FASB to issue more useful and consist
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ent pronouncements over time.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fina
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ncial Statement Analysis, IFRS: None RT RT RT RT




12. A conceptual framework is a coherent system of concepts that flow from an objective.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fina
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ncial Statement Analysis, IFRS: None RT RT RT RT




13. The first level of the conceptual framework identifies the recognition, measurement, and discl
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osure concepts used in establishing accounting standards.
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Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
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ancial Statement Analysis, IFRS: None RT RT RT RT




14. The objective of financial reporting serves as the foundation of the conceptual framework.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fina
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ncial Statement Analysis, IFRS: None RT RT RT RT




15. Users of financial statements are assumed to need no knowledge of business and financial accounting
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matters to understand the information contained in financial statements.
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Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
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ancial Statement Analysis, IFRS: None RT RT RT RT




16. Relevance and faithful representation are the two fundamental qualities that make a
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ccounting information useful for decision-making. RT RT RT RT




Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fina
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ncial Statement Analysis, IFRS: None RT RT RT RT




17. The idea of consistency does not mean that companies cannot switch from one accounting method to
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another.
Ans: T, LO: 2, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Financial St
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atement Analysis, IFRS: None RT RT RT




18. Timeliness and neutrality are two ingredients of relevance. RT RT RT RT RT RT RT




Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fin
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ancial Statement Analysis, IFRS: None RT RT RT RT




19. Verifiability and predictive value are two ingredients of faithful representation. RT RT RT RT RT RT RT RT RT




Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control: Fina
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ncial Statement Analysis, IFRS: None RT RT RT RT




20. Revenues, gains, and distributions to owners all increase equity. RT RT RT RT RT RT RT RT




Ans: F, LO: 2, Bloom: C, Difficulty: Moderate, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA PC:
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None, IMA: Reporting & Control: Financial Statement Analysis, IFRS: None
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21. Comprehensive income includes all changes in equity during a period except those r R T R T R T R T R T R T R T R T R T R T R T RT




esulting from investments by owners and distributions to owners.
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Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA
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eporting & Control: Financial Statement Analysis, IFRS: None RT RT RT RT RT RT RT