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Sample-Test Bank Intermediate Accounting 9th 9E David
Spiceland-Answer Key
Consolidated Financial Statement (Trường Đại học Kinh tế Thành phố Hồ Chí Minh)
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Intermediate Accounting, 9e (Spiceland)
Chapter 1 Environment and Theoretical Structure of Financial Accounting
1) The primary function of financial accounting is to provide relevant financial information to
parties external to business enterprises.
Answer: TRUE
Difficulty: 1 Easy
Topic: Environment of financial accounting and reporting
Learning Objective: 01-01 Describe the function and primary focus of financial accounting.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
2) Accrual accounting attempts to measure revenues and expenses that occurred during
accounting periods so they equal net operating cash flow.
Answer: FALSE
Difficulty: 1 Easy
Topic: Cash versus accrual accounting
Learning Objective: 01-02 Explain the difference between cash and accrual accounting.
Bloom's: Understand
AACSB: Reflective Thinking
Accessible/AICPA: FN Measurement; Keyboard Navigation
3) The FASB is currently the public-sector organization responsible for setting accounting
standards in the United States.
Answer: FALSE
Difficulty: 1 Easy
Topic: Development of accounting and reporting standards
Learning Objective: 01-03 Define generally accepted accounting principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and international standards.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
4) The FASB's due process invites various interested parties to indicate their opinions about
whether financial accounting standards should be changed.
Answer: TRUE
Difficulty: 1 Easy
Topic: GAAP―Standard-setting process
Learning Objective: 01-04 Explain why establishing accounting standards is characterized as a political process.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
1
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5) Accounting for stock-based compensation is an area in which the FASB has received little
political interference.
Answer: FALSE
Difficulty: 1 Easy
Topic: GAAP―Standard-setting process
Learning Objective: 01-04 Explain why establishing accounting standards is characterized as a political process.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
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
Difficulty: 1 Easy
Topic: Encouraging high-quality financial reporting
Learning Objective: 01-05 Explain factors that encourage high-quality financial reporting.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
7) A rules-based approach to standard-setting stresses professional judgment as opposed to
following a list of rules.
Answer: FALSE
Difficulty: 1 Easy
Topic: Encouraging high-quality financial reporting
Learning Objective: 01-05 Explain factors that encourage high-quality financial reporting.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
8) Under federal securities laws, the SEC has the authority to set accounting standards in the
United States.
Answer: TRUE
Difficulty: 1 Easy
Topic: Development of accounting and reporting standards
Learning Objective: 01-03 Define generally accepted accounting principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and international standards.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
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
Difficulty: 1 Easy
Topic: Encouraging high-quality financial reporting
Learning Objective: 01-05 Explain factors that encourage high-quality financial reporting.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
2
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10) Auditors play an important role in the resource allocation process by adding credibility to
financial statements.
Answer: TRUE
Difficulty: 1 Easy
Topic: Encouraging high-quality financial reporting
Learning Objective: 01-05 Explain factors that encourage high-quality financial reporting.
Bloom's: Understand
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
11) The purpose of the conceptual framework is to provide a structure and framework for a
consistent set of GAAP.
Answer: TRUE
Difficulty: 1 Easy
Topic: Conceptual framework―Purpose
Learning Objective: 01-06 Explain the purpose of the conceptual framework.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
12) In the United States, the conceptual framework indicates GAAP when a more specific
accounting standard does not apply.
Answer: FALSE
Difficulty: 1 Easy
Topic: Conceptual framework―Purpose
Learning Objective: 01-06 Explain the purpose of the conceptual framework.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
13) Materiality can be affected by the dollar amount of an item, the nature of the item, or both.
Answer: TRUE
Difficulty: 1 Easy
Topic: Concepts―Qualitative characteristics
Learning Objective: 01-07 Identify the objective and qualitative characteristics of financial reporting information, and the
elements of financial statements.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; FN Measurement; Keyboard Navigation
14) According to the FASB's Statements of Financial Accounting Concepts, conservatism is a
desired qualitative characteristic of accounting information.
Answer: FALSE
Difficulty: 1 Easy
Topic: Concepts―Qualitative characteristics
Learning Objective: 01-07 Identify the objective and qualitative characteristics of financial reporting information, and the
elements of financial statements.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; FN Measurement; Keyboard Navigation
3
Copyright ©2018 McGraw-Hill
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Sample-Test Bank Intermediate Accounting 9th 9E David
Spiceland-Answer Key
Consolidated Financial Statement (Trường Đại học Kinh tế Thành phố Hồ Chí Minh)
Studocu is not sponsored or endorsed by any college or university
Downloaded by john gatheca ()
, lOMoARcPSD|28964921
Intermediate Accounting, 9e (Spiceland)
Chapter 1 Environment and Theoretical Structure of Financial Accounting
1) The primary function of financial accounting is to provide relevant financial information to
parties external to business enterprises.
Answer: TRUE
Difficulty: 1 Easy
Topic: Environment of financial accounting and reporting
Learning Objective: 01-01 Describe the function and primary focus of financial accounting.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
2) Accrual accounting attempts to measure revenues and expenses that occurred during
accounting periods so they equal net operating cash flow.
Answer: FALSE
Difficulty: 1 Easy
Topic: Cash versus accrual accounting
Learning Objective: 01-02 Explain the difference between cash and accrual accounting.
Bloom's: Understand
AACSB: Reflective Thinking
Accessible/AICPA: FN Measurement; Keyboard Navigation
3) The FASB is currently the public-sector organization responsible for setting accounting
standards in the United States.
Answer: FALSE
Difficulty: 1 Easy
Topic: Development of accounting and reporting standards
Learning Objective: 01-03 Define generally accepted accounting principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and international standards.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
4) The FASB's due process invites various interested parties to indicate their opinions about
whether financial accounting standards should be changed.
Answer: TRUE
Difficulty: 1 Easy
Topic: GAAP―Standard-setting process
Learning Objective: 01-04 Explain why establishing accounting standards is characterized as a political process.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
1
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5) Accounting for stock-based compensation is an area in which the FASB has received little
political interference.
Answer: FALSE
Difficulty: 1 Easy
Topic: GAAP―Standard-setting process
Learning Objective: 01-04 Explain why establishing accounting standards is characterized as a political process.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
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
Difficulty: 1 Easy
Topic: Encouraging high-quality financial reporting
Learning Objective: 01-05 Explain factors that encourage high-quality financial reporting.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
7) A rules-based approach to standard-setting stresses professional judgment as opposed to
following a list of rules.
Answer: FALSE
Difficulty: 1 Easy
Topic: Encouraging high-quality financial reporting
Learning Objective: 01-05 Explain factors that encourage high-quality financial reporting.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
8) Under federal securities laws, the SEC has the authority to set accounting standards in the
United States.
Answer: TRUE
Difficulty: 1 Easy
Topic: Development of accounting and reporting standards
Learning Objective: 01-03 Define generally accepted accounting principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and international standards.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Legal; Keyboard Navigation
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
Difficulty: 1 Easy
Topic: Encouraging high-quality financial reporting
Learning Objective: 01-05 Explain factors that encourage high-quality financial reporting.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
2
Copyright ©2018 McGraw-Hill
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10) Auditors play an important role in the resource allocation process by adding credibility to
financial statements.
Answer: TRUE
Difficulty: 1 Easy
Topic: Encouraging high-quality financial reporting
Learning Objective: 01-05 Explain factors that encourage high-quality financial reporting.
Bloom's: Understand
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
11) The purpose of the conceptual framework is to provide a structure and framework for a
consistent set of GAAP.
Answer: TRUE
Difficulty: 1 Easy
Topic: Conceptual framework―Purpose
Learning Objective: 01-06 Explain the purpose of the conceptual framework.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
12) In the United States, the conceptual framework indicates GAAP when a more specific
accounting standard does not apply.
Answer: FALSE
Difficulty: 1 Easy
Topic: Conceptual framework―Purpose
Learning Objective: 01-06 Explain the purpose of the conceptual framework.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; Keyboard Navigation
13) Materiality can be affected by the dollar amount of an item, the nature of the item, or both.
Answer: TRUE
Difficulty: 1 Easy
Topic: Concepts―Qualitative characteristics
Learning Objective: 01-07 Identify the objective and qualitative characteristics of financial reporting information, and the
elements of financial statements.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; FN Measurement; Keyboard Navigation
14) According to the FASB's Statements of Financial Accounting Concepts, conservatism is a
desired qualitative characteristic of accounting information.
Answer: FALSE
Difficulty: 1 Easy
Topic: Concepts―Qualitative characteristics
Learning Objective: 01-07 Identify the objective and qualitative characteristics of financial reporting information, and the
elements of financial statements.
Bloom's: Remember
AACSB: Reflective Thinking
Accessible/AICPA: BB Critical thinking; FN Measurement; Keyboard Navigation
3
Copyright ©2018 McGraw-Hill
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