Intermediate Accounting Chapter
1 Questions with Accurate
Answers
Asset/Liability Approach correct answer Recording transactions based on revenue
recognition criteria involves an income statement approach
-FASB now uses this approach
Define accounting standard setters correct answer Accounting standard setters
develop and promulgate accounting concepts, rules, and guidelines that provide
information that is relevant and faithfully represents the economic performance
and the financial position of the reporting entity (example: FASB and IASB)
Define Accounting Standards Codification correct answer Codification is the single
source of GAAP in the United States and included all pronouncements issued by
an of the standard-setting bodies that have not been superseded
Define external auditors correct answer Independent of the company and are
responsible for ensuring that management prepares and issues financial
statements that comply with accounting standards and fairly present the financial
position and economic performance of the company. Bc independent of the
company, they lend a significant amount of accountability to the financial
statements
Define internal auditors correct answer Employees of the company serving in an
advisory role to management and providing information regarding the company's
operations and proper functioning of its internal controls
, Define proactive factors and give an example correct answer Financial accounting
is proactive in that it can change or influence its environment by providing
feedback information that is used by organizations and individuals to reshape the
economy. Example: expensing research and development costs may slow
investment in research during economic downturns because this accounting
treatment results in lower earnings figures
Define reactive factors and give examples correct answer Financial accounting
reacts to pressure (lobbying) from various groups and changes in its environment.
Accounting theories and procedures evolve to meet the dynamic changes and
demands from the environment. In addition, accounting conforms to economic
conditions, legal standards, and social values
Define regulatory bodies correct answer Protect investors and oversee the
accounting stand-setting process (example: in the U.S. the U.S. Securities and
Exchange Commission (SEC) regulates publicly traded companies
Define the influence of the legal, economic, political, and social environment on
financial reporting correct answer Financial statement users' information needs
change as business evolves. Legal, economic, political, and social factors shape
and influence the financial reporting process. Financial accounting interacts with
its environment in both a reactive and proactive fashion
Fair value correct answer The amount at which an asset (or liability) could be
bought (or incurred) or sold (or settled) in a current transaction between willing
parties
How many members is the IASB comprised of? How much are full time? How
many from each region of the world? correct answer 16 total members, at least
13 must be full time.
1 Questions with Accurate
Answers
Asset/Liability Approach correct answer Recording transactions based on revenue
recognition criteria involves an income statement approach
-FASB now uses this approach
Define accounting standard setters correct answer Accounting standard setters
develop and promulgate accounting concepts, rules, and guidelines that provide
information that is relevant and faithfully represents the economic performance
and the financial position of the reporting entity (example: FASB and IASB)
Define Accounting Standards Codification correct answer Codification is the single
source of GAAP in the United States and included all pronouncements issued by
an of the standard-setting bodies that have not been superseded
Define external auditors correct answer Independent of the company and are
responsible for ensuring that management prepares and issues financial
statements that comply with accounting standards and fairly present the financial
position and economic performance of the company. Bc independent of the
company, they lend a significant amount of accountability to the financial
statements
Define internal auditors correct answer Employees of the company serving in an
advisory role to management and providing information regarding the company's
operations and proper functioning of its internal controls
, Define proactive factors and give an example correct answer Financial accounting
is proactive in that it can change or influence its environment by providing
feedback information that is used by organizations and individuals to reshape the
economy. Example: expensing research and development costs may slow
investment in research during economic downturns because this accounting
treatment results in lower earnings figures
Define reactive factors and give examples correct answer Financial accounting
reacts to pressure (lobbying) from various groups and changes in its environment.
Accounting theories and procedures evolve to meet the dynamic changes and
demands from the environment. In addition, accounting conforms to economic
conditions, legal standards, and social values
Define regulatory bodies correct answer Protect investors and oversee the
accounting stand-setting process (example: in the U.S. the U.S. Securities and
Exchange Commission (SEC) regulates publicly traded companies
Define the influence of the legal, economic, political, and social environment on
financial reporting correct answer Financial statement users' information needs
change as business evolves. Legal, economic, political, and social factors shape
and influence the financial reporting process. Financial accounting interacts with
its environment in both a reactive and proactive fashion
Fair value correct answer The amount at which an asset (or liability) could be
bought (or incurred) or sold (or settled) in a current transaction between willing
parties
How many members is the IASB comprised of? How much are full time? How
many from each region of the world? correct answer 16 total members, at least
13 must be full time.
