TEST BANK For Intermediate Accounting, 11th Edition by David Spiceland, Mark Nelson, Wayne Thomas, Jennifer. All Chapters 1-21

Full Test Bank For n n n




IntermediateAccounting, 11thEdition
n n n




Answer Key n




Testname:chapter1
n n n




n 1)
TERM PHRASE Term number n




thatmatches
n n




the phrase.
n




1. Predictive value
n n Information is useful in n n n 1
projecting cash flows.
n n n




2. Relevance
n Pertinent to the decision at n n n n 2
hand.
3. Distribution to
n n Information is available prior n n n 5
owners to the decision.
n n




4. Confirmatory
n Decrease in equity due to n n n n 3
value transfers to owners.
n n n




5. Timeliness
n Information confirms n 4
expectations.
2)
TERM PHRASE Term number n




thatmatches
n n




the phrase.
n




1. Gain
n Along with relevance, a n n n 5
fundamentaldecision-specific n




quality.
n




2. Materiality
n Results if an asset is sold for
n n n n n n 1
more than book value.
n n n




3. Completeness
n Contains all information necessary n n n 3
for faithful
n n




representation.
4. Comprehensive
n The change in equity from
n n n n 4
income nonowner transactions. n




Version 1 n 1

, 5. Faithful
n Concerns the decision-making n n 2
representation
n impact of both the amount and nature
n n n n n n




of an item.
n n n




3)
TERM PHRASE Term number n




thatmatches n




the phrase.
n n




1. Neutrality
n Important in analysis between n n n 2
firms.
n




2. Comparability
n Accounting information should n n 1
be unbiased.
n




3. Consistency
n The decision to include an
n n n n 5
amount in the financial statements.
n n n n




4. Cost-effectiveness
n Applying the same accounting n n n 3
practices over time. n n




5. Recognition
n Considers the value of using n n n n 4
information relative to cost of n n n n




providing it.
n n




4)
TERM PHRASE Term number n




thatmatches
n n




the phrase. n




1. Monetary unit
n n Implies consensus among different
n n n 2
assumption
n observers.
n




2. Verifiability
n Assumes all transactions can be
n n n n 3
identified with a particular
n n n n




entity.
3. Economic entity
n n Assumes an entity will continue to
n n n n n 4
assumption operate indefinitely.
n n




4. Going concern
n n Requires reporting the n n 5
assumption
n financial life of an entity in n n n n n




discrete time frames.
n n n




5. Periodicity
n Ignores the possibility of n n n 1
assumption inflation.
n




5)
TERM PHRASE Term number n




thatmatches
n n




the phrase. n




1. Historical cost
n n Basis of measurement for fixed
n n n n 1


Version 1 n 2

, assets.
2. Materiality
n Discounts future cash flows. n n n 5
3. Revenue
n Occurs when goods or services n n n n 3
recognition
n are transferred to the customer.
n n n n




4. Full disclosure
n n Reporting of all information n n n 4
that could affect decisions.
n n n




5. Present value
n n Application of GAAP sometimes n n n 2
avoided under this constraint. n n n




6)
TERM PHRASE Term number n




thatmatches
n n




the phrase.
n




1. Financial
n Undermines representational n 3
AccountingStandards n faithfulness by being inconsistent n n n




Board
n with neutrality.
n n




2. Accounting
n It established GAAP before the
n n n n 2
Principles Board n FASB.
3. Conservatism
n Its EITF Issues are GAAP when
n n n n n 1
entered in the Accounting Standards n n n n




Codification.
n




4. American Institute
n n It has the authority to set U.S.
n n n n n n 5
of CPAs
n n accounting standards.
n n




(AICPA)
5. Securities and
n n It is the national organization for
n n n n n 4
ExchangeCommission
n n CPAs in the United States.
n n n n n




7)
TERM PHRASE Term number n




thatmatches
n n




the phrase.
n




1. Expenses
n Net assets. n 2
2. Equity
n Outflows of resources to n n n 1
generate revenues.
n n




3. Distributions to
n n Cash dividends. n 3
owners
4. Investments by
n n Claims of creditors against the n n n n 5
owners assets of a business.
n n n n




5. Liabilities
n Transfers of resources in n n n 4
exchange for common and
n n n n




preferred stock. n




Version 1 n 3

, 8)
TERM PHRASE Term number n




thatmatches n




nthe phrase.n




1. Losses
n Net outflows from peripheral
n n n 1
transactions.
n




2. Assets
n Increases in equity from the n n n n 3
sale of goods and/or services.
n n n n




3. Revenues
n Results if an asset is sold for more n n n n n n n 5
than book value.
n n n




4. Comprehensive
n All changes in equity except
n n n n 4
income owner transactions. n




5. Gains
n Probable future economic n n 2
benefits controlled by an entity. n n n n




9)
TERM PHRASE Term number n




thatmatches
n n




the phrase.
n




1. SEC
n Establishes auditing standards in the n n n n 6
U.S. for public companies.
n n n n




2. FASB
n Primary national organization of
n n n 7
accountants working in industry. n n n




3. IASB
n Sets accounting standards in the
n n n n 2
United States. n




4. AICPA
n Provides timely responses to financial
n n n n 5
reporting issues.
n n




5. EITF
n The FASB's parent organization.
n n n 10
6. PCAOB
n Advises the FASB. n n 8
7. IMA
n FASB's predecessor. n 9
8. FASAC
n Regulates the financial reporting n n n 1
for public companies.
n n




9. APB
n National organization of certified n n n 4
public accountants.
n n




10. FAFn Sets global accounting standards.
n n n 3




Version 1 n 4