TEST BANK FOR
Intermediate Accounting
by David Spiceland, Mark W. Nelson
11th Edition
,Chapter 1 Environment and Theoretical Structure of Financial Accounting
True/False Questions
1. The Primary Function Of Financial Accounting Is To Provide Relevant Financial
Information To Parties External To Business Enterprises.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-01
Topic Area: Environment Of Financial Accounting And
Reporting Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
2. Accrual Accounting Attempts To Measure Revenues And Expenses That Occurred
During Accounting Periods So They Equal Net Operating Cash Flow.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-02
Topic Area: Cash Versus Accrual Accounting
Blooms: Understand
AACSB: Reflective Thinking
AICPA: FN Measurement
3. The FASB Is Currently The Public-Sector Organization Responsible For Setting
Accounting Standards In The United States.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-03
Topic Area: Development Of Accounting And Reporting
Standards Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
4. The FASB’s Due Process Invites Various Interested Parties To Indicate Their Opinions
About Whether Financial Accounting Standards Should Be Changed.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-04
Topic Area: GAAP―Standard-Setting Process
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
5. Accounting For Stock-Based Compensation Is An Area In Which The FASB Has
Received Little Political Interference.
,Chapter 1 Environment and Theoretical Structure of Financial Accounting
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-04
Topic Area: GAAP―Standard-Setting Process
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
6. The Public Reform And Investor Protection Act Of 2002 (Sarbanes-Oxley) Changed The
Entity Responsible For Setting Auditing Standards In The United States.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
7. A Rules-Based Approach To Standard-Setting Stresses Professional Judgment As
Opposed To Following A List Of Rules.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
8. Under Federal Securities Laws, The SEC Has The Authority To Set Accounting
Standards In The United States.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-03
Topic Area: Development Of Accounting And Reporting
Standards Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
9. The Primary Responsibility For Properly Applying GAAP When Communicating With
Investors And Creditors Through Financial Statements Lies With A Firm's Auditors.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting
, Chapter 1 Environment and Theoretical Structure of Financial Accounting
Blooms: Remember
AACSB: Reflective
Thinking
AICPA: BB Critical Thinking
10. Auditors Play An Important Role In The Resource Allocation Process By Adding
Credibility To Financial Statements.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
11. The Purpose Of The Conceptual Framework Is To Provide A Structure And
Framework For A Consistent Set Of GAAP.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-06
Topic Area: Conceptual Framework―Purpose
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
12. In The United States The Conceptual Framework Indicates GAAP When A More
Specific Accounting Standard Does Not Apply.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-06
Topic Area: Conceptual Framework―Purpose
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
13. Materiality Can Be Affected By The Dollar Amount Of An Item, The Nature Of The Item, Or Both.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-07
Topic Area: Concepts―Qualitative Characteristics
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
Intermediate Accounting
by David Spiceland, Mark W. Nelson
11th Edition
,Chapter 1 Environment and Theoretical Structure of Financial Accounting
True/False Questions
1. The Primary Function Of Financial Accounting Is To Provide Relevant Financial
Information To Parties External To Business Enterprises.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-01
Topic Area: Environment Of Financial Accounting And
Reporting Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
2. Accrual Accounting Attempts To Measure Revenues And Expenses That Occurred
During Accounting Periods So They Equal Net Operating Cash Flow.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-02
Topic Area: Cash Versus Accrual Accounting
Blooms: Understand
AACSB: Reflective Thinking
AICPA: FN Measurement
3. The FASB Is Currently The Public-Sector Organization Responsible For Setting
Accounting Standards In The United States.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-03
Topic Area: Development Of Accounting And Reporting
Standards Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
4. The FASB’s Due Process Invites Various Interested Parties To Indicate Their Opinions
About Whether Financial Accounting Standards Should Be Changed.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-04
Topic Area: GAAP―Standard-Setting Process
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
5. Accounting For Stock-Based Compensation Is An Area In Which The FASB Has
Received Little Political Interference.
,Chapter 1 Environment and Theoretical Structure of Financial Accounting
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-04
Topic Area: GAAP―Standard-Setting Process
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
6. The Public Reform And Investor Protection Act Of 2002 (Sarbanes-Oxley) Changed The
Entity Responsible For Setting Auditing Standards In The United States.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
7. A Rules-Based Approach To Standard-Setting Stresses Professional Judgment As
Opposed To Following A List Of Rules.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
8. Under Federal Securities Laws, The SEC Has The Authority To Set Accounting
Standards In The United States.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-03
Topic Area: Development Of Accounting And Reporting
Standards Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal
9. The Primary Responsibility For Properly Applying GAAP When Communicating With
Investors And Creditors Through Financial Statements Lies With A Firm's Auditors.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting
, Chapter 1 Environment and Theoretical Structure of Financial Accounting
Blooms: Remember
AACSB: Reflective
Thinking
AICPA: BB Critical Thinking
10. Auditors Play An Important Role In The Resource Allocation Process By Adding
Credibility To Financial Statements.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting
Blooms: Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
11. The Purpose Of The Conceptual Framework Is To Provide A Structure And
Framework For A Consistent Set Of GAAP.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-06
Topic Area: Conceptual Framework―Purpose
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
12. In The United States The Conceptual Framework Indicates GAAP When A More
Specific Accounting Standard Does Not Apply.
Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-06
Topic Area: Conceptual Framework―Purpose
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
13. Materiality Can Be Affected By The Dollar Amount Of An Item, The Nature Of The Item, Or Both.
Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-07
Topic Area: Concepts―Qualitative Characteristics
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement
