Test Bank for Intermediate Accounting, 3rd Edition by Jana Smith Raedy, Elizabeth A. Gordon, and Alexander John Sannella |all chapters covered|

TEST BANK
Intermediate Accounting
Elizabeth A. Gordon Jana S. Raedy, Alexander J.
Sannella
3rd Edition




FULL TEST BANK!!!

,Intermediate Accounting, 3e (Gordon/Raedy/Sannella)
Chapter 1 The Financial Reporting Environment

1.1 Overview of Financial Reporting

1) The financial reporting process generates three basic financial
statements. Answer: FALSE
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

2) The demand for financial information is based on market participant
demand. Answer: TRUE
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

3) Managers of economic entities are best considered to be users of financial
information. Answer: FALSE
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

4) Managers of economic entities are best considered to be preparers of financial
information. Answer: TRUE
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

5) The Securities and Exchange Commission (SEC) regulates financial reporting for
publicly traded companies.
Answer: TRUE
Diff: 2
Objective: 1.1
IFRS/GAAP: GAAP
AACSB: Application of knowledge

6) The FASB gives the SEC authority to regulate accounting for publicly traded
companies. Answer: FALSE
Diff: 1
Objective: 1.1
IFRS/GAAP: GAAP
AACSB: Application of knowledge


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,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting
standards and oversees the audits of public companies in the United States.
Answer: FALSE
Diff: 1
Objective: 1.1
IFRS/GAAP: GAAP
AACSB: Application of knowledge

8) Financial accounting standards influence the behavior of managers and other
internal users. Answer: TRUE
Diff: 2
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

9) Theories and procedures that evolve as a result of lobbying from various groups are
examples of proactive factors within the legal, economic, political, and social
environment.
Answer: FALSE
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

10) Financial information includes information that is not governed by rules set forth by the
accounting standard-setting bodies.
Answer: TRUE
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

11) What is the term that describes the process of identifying, measuring, and
communicating financial information about an economic entity to various user groups?
A) financial reporting
B) accounting standard setting
C) financial statement
D) financial
accounting Answer:
D
Diff: 2
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge




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, 12) Which element of financial accounting involves identifying the individuals who demand
financial information?
A) financial information
B) economic entity
C) user groups
D) legal, economic, political, and social
environment Answer: C
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

13) Which of the following is not one of the four basic financial statements?
A) balance sheet
B) trial balance
C) cash flows statement
D) statement of comprehensive
income Answer: B
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

14) Which organization is responsible for promulgating U.S. GAAP?
A) Financial Accounting Standards Board
B) Public Company Accounting Oversight Board
C) International Accounting Standards Board
D) Securities and Exchange
Commission Answer: A
Diff: 1
Objective: 1.1
IFRS/GAAP:
GAAP/IFRS
AACSB: Application of knowledge

15) Which organization is responsible for setting auditing standards and overseeing the audits
of public companies in the United States?
A) Financial Accounting Standards Board
B) Public Company Accounting Oversight Board
C) American Institute of Certified Public Accountants
D) Securities and Exchange
Commission Answer: B
Diff: 1
Objective: 1.1
IFRS/GAAP: GAAP
AACSB: Application of knowledge




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