Acct 110 Exam 1 2025 Questions and
Answers
Generally accepted accounting principles, or GAAP, are the rules and procedures established by the
Financial Accounting Standards Board, or the FASB. - ANSWER✔️✔️-True
The SEC sets international financial reporting standards. - ANSWER✔️✔️-False
The fundamental qualitative characteristics are Relevance and Faithful Representation. -
ANSWER✔️✔️-True
Information that is material must be separately disclosed in the financial statements. -
ANSWER✔️✔️-True
Another name for the continuity assumption is the going-concern assumption - ANSWER✔️✔️-
True
Under current accounting rules, the carrying value of a building can be increased to its fair value. -
ANSWER✔️✔️-False
Accounting is moving in the direction of reporting more and more assets and liabilities at their fair
values. - ANSWER✔️✔️-True
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
, Since we live in a global economy, all countries have adopted the same accounting standards for
business transactions. - ANSWER✔️✔️-False
Cost is a verifiable measure that is relatively free from bias. - ANSWER✔️✔️-True
The Financial Accounting Standards Board is responsible for establishing... - ANSWER✔️✔️-
Generally Accepted Accounting Principles
The acronym GAAP stands for: - ANSWER✔️✔️-Generally Accepted Accounting Principles
_________Means that the accounting information for a company must be prepared in such a way as
to be capable of being compared with information from other companies in the same period and
consistent with similar information for that company in previous periods. - ANSWER✔️✔️-
Comparability
Which of the following is a correct statement about GAA and IFRS? - ANSWER✔️✔️-The FASB
and IASB are working towards convergence of standards.
To be useful, accounting information must have the fundamental qualitative characteristics of: -
ANSWER✔️✔️-Relevance and Faithful Representation
All of the following are true statements about the entity assumption EXEPT for: -
ANSWER✔️✔️-The entity assumption ensures that the business will continue indefinitely.
Verifiability means that the information: - ANSWER✔️✔️-must be capable of being checked for
accuracy.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
Answers
Generally accepted accounting principles, or GAAP, are the rules and procedures established by the
Financial Accounting Standards Board, or the FASB. - ANSWER✔️✔️-True
The SEC sets international financial reporting standards. - ANSWER✔️✔️-False
The fundamental qualitative characteristics are Relevance and Faithful Representation. -
ANSWER✔️✔️-True
Information that is material must be separately disclosed in the financial statements. -
ANSWER✔️✔️-True
Another name for the continuity assumption is the going-concern assumption - ANSWER✔️✔️-
True
Under current accounting rules, the carrying value of a building can be increased to its fair value. -
ANSWER✔️✔️-False
Accounting is moving in the direction of reporting more and more assets and liabilities at their fair
values. - ANSWER✔️✔️-True
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
, Since we live in a global economy, all countries have adopted the same accounting standards for
business transactions. - ANSWER✔️✔️-False
Cost is a verifiable measure that is relatively free from bias. - ANSWER✔️✔️-True
The Financial Accounting Standards Board is responsible for establishing... - ANSWER✔️✔️-
Generally Accepted Accounting Principles
The acronym GAAP stands for: - ANSWER✔️✔️-Generally Accepted Accounting Principles
_________Means that the accounting information for a company must be prepared in such a way as
to be capable of being compared with information from other companies in the same period and
consistent with similar information for that company in previous periods. - ANSWER✔️✔️-
Comparability
Which of the following is a correct statement about GAA and IFRS? - ANSWER✔️✔️-The FASB
and IASB are working towards convergence of standards.
To be useful, accounting information must have the fundamental qualitative characteristics of: -
ANSWER✔️✔️-Relevance and Faithful Representation
All of the following are true statements about the entity assumption EXEPT for: -
ANSWER✔️✔️-The entity assumption ensures that the business will continue indefinitely.
Verifiability means that the information: - ANSWER✔️✔️-must be capable of being checked for
accuracy.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
