TEST BANK for Intermediate Accounting (Volume 1), 8th
Canadian Edition By Thomas H. Beechy, Joan E. Conrod,
Verified Chapters 1 - 11, Complete Newest Version
The FASB Accounting Standards Codification is expected to provide all of the
following benefits except
a. to reduce the research time necessary to solve an accounting research issue.
b. to codify authoritative support such as results of academic research.
c. to provide real-time updates as new standards are issued.
d. to improve the usability of the authoritative accounting literature. - ANSWER: b. to
codify authoritative support such as results of academic research.
Which of the following statements regarding the requirement to follow U.S. GAAP in
financial reporting is true?
a. U.S. GAAP has been adopted as federal law, so failure to follow U.S. GAAP is
prosecuted through the federal court system.
b. U.S. GAAP has been adopted as state law in all 50 states, so failure to follow U.S.
GAAP is prosecuted through the state court system.
c. U.S. GAAP represents a set of professional standards, and the requirement to
follow U.S. GAAP is enforced through the AICPA Code of Professional Conduct.
d. Compliance with U.S. GAAP is not enforced; it is a voluntary choice made by most
companies and by most professional accountants - ANSWER: c. U.S. GAAP represents
a set of professional standards, and the requirement to follow U.S. GAAP is enforced
through the AICPA Code of Professional Conduct.
Which of the following statements about the FASB Accounting Standards
Codification is true?
a. It only exists as an electronic database; paper copies are not available.
b. When the Codification was adopted in 2009, it caused major changes in the
contents of U.S. GAAP.
c. It is reviewed and periodically updated by the SEC.
d. It is only one of a large number of authoritative pronouncements that have been
issued over time, all of which comprise U.S GAAP. - ANSWER: a. It only exists as an
electronic database; paper copies are not available.
Which of the following statements about the FASB Accounting Standards
Codification is false?
a. The Codification is currently the only authoritative source of U.S. GAAP.
b. The purpose of creating the Codification was to simplify user access to
authoritative U.S. GAAP.
c. The framework of the Codification contains six levels, which are increasingly more
specific.
d. The six levels contained within the Codification framework are hierarchical in
nature, such that the higher levels are considered to be more authoritative than the
lower levels. - ANSWER: d. The six levels contained within the Codification
, framework are hierarchical in nature, such that the higher levels are considered to
be more authoritative than the lower levels.
Prior to 2009, which of the following types of FASB Pronouncements carried the
highest authority within GAAP by establishing the methods and procedures required
on specific accounting issues?
a. Staff Positions
b. Statements of Financial Accounting Standards
c. Statements of Financial Accounting Concepts
d. Technical Bulletins - ANSWER: b. Statements of Financial Accounting Standards
Which of the following documents includes all of the accounting standards?
a. Regulation S-X
b. The FASB Conceptual Framework
c. Statements of Financial Accounting Standards
d. none of these - ANSWER: none of these
The FASB Accounting Standards Codification includes six levels or components.
Which of the following is not one of those levels?
a. Area
b. Topic
c. Sub-paragraphs
d. Paragraphs - ANSWER: Sub-paragraphs
The city of Anchorage sold land for its appraised value to the Big Bear Oil Company
on June 1, 2014, that originally cost the city $950,000. On June 1, 2014, the land was
appraised at a value of $1,400,000, and on December 31, 2014, the land's value was
estimated to be $1,450,000. On Big Bear Oil Company's balance sheet at December
31, 2014, the land should be valued at - ANSWER: $1,400,000
Which of the following sets includes only accounting assumptions and conventions?
a. timeliness, prudence, historical cost, and neutrality
b. matching, comparability, period of time, and faithful representation
c. monetary unit, going concern, relevance, and materiality
d. monetary unit, entity, going concern, and recognition - ANSWER: d. monetary
unit, entity, going concern, and recognition
The state legislature is currently debating a bill that, if passed, would require the
Roberts Company to go out of business. Which of the following principles or
assumptions related to the preparation of Roberts financial statements is most
directly affected by this impending vote of the legislature?
a. going concern
b. verifiability principle
c. entity concept
d. materiality concept - ANSWER: a. going concern
Canadian Edition By Thomas H. Beechy, Joan E. Conrod,
Verified Chapters 1 - 11, Complete Newest Version
The FASB Accounting Standards Codification is expected to provide all of the
following benefits except
a. to reduce the research time necessary to solve an accounting research issue.
b. to codify authoritative support such as results of academic research.
c. to provide real-time updates as new standards are issued.
d. to improve the usability of the authoritative accounting literature. - ANSWER: b. to
codify authoritative support such as results of academic research.
Which of the following statements regarding the requirement to follow U.S. GAAP in
financial reporting is true?
a. U.S. GAAP has been adopted as federal law, so failure to follow U.S. GAAP is
prosecuted through the federal court system.
b. U.S. GAAP has been adopted as state law in all 50 states, so failure to follow U.S.
GAAP is prosecuted through the state court system.
c. U.S. GAAP represents a set of professional standards, and the requirement to
follow U.S. GAAP is enforced through the AICPA Code of Professional Conduct.
d. Compliance with U.S. GAAP is not enforced; it is a voluntary choice made by most
companies and by most professional accountants - ANSWER: c. U.S. GAAP represents
a set of professional standards, and the requirement to follow U.S. GAAP is enforced
through the AICPA Code of Professional Conduct.
Which of the following statements about the FASB Accounting Standards
Codification is true?
a. It only exists as an electronic database; paper copies are not available.
b. When the Codification was adopted in 2009, it caused major changes in the
contents of U.S. GAAP.
c. It is reviewed and periodically updated by the SEC.
d. It is only one of a large number of authoritative pronouncements that have been
issued over time, all of which comprise U.S GAAP. - ANSWER: a. It only exists as an
electronic database; paper copies are not available.
Which of the following statements about the FASB Accounting Standards
Codification is false?
a. The Codification is currently the only authoritative source of U.S. GAAP.
b. The purpose of creating the Codification was to simplify user access to
authoritative U.S. GAAP.
c. The framework of the Codification contains six levels, which are increasingly more
specific.
d. The six levels contained within the Codification framework are hierarchical in
nature, such that the higher levels are considered to be more authoritative than the
lower levels. - ANSWER: d. The six levels contained within the Codification
, framework are hierarchical in nature, such that the higher levels are considered to
be more authoritative than the lower levels.
Prior to 2009, which of the following types of FASB Pronouncements carried the
highest authority within GAAP by establishing the methods and procedures required
on specific accounting issues?
a. Staff Positions
b. Statements of Financial Accounting Standards
c. Statements of Financial Accounting Concepts
d. Technical Bulletins - ANSWER: b. Statements of Financial Accounting Standards
Which of the following documents includes all of the accounting standards?
a. Regulation S-X
b. The FASB Conceptual Framework
c. Statements of Financial Accounting Standards
d. none of these - ANSWER: none of these
The FASB Accounting Standards Codification includes six levels or components.
Which of the following is not one of those levels?
a. Area
b. Topic
c. Sub-paragraphs
d. Paragraphs - ANSWER: Sub-paragraphs
The city of Anchorage sold land for its appraised value to the Big Bear Oil Company
on June 1, 2014, that originally cost the city $950,000. On June 1, 2014, the land was
appraised at a value of $1,400,000, and on December 31, 2014, the land's value was
estimated to be $1,450,000. On Big Bear Oil Company's balance sheet at December
31, 2014, the land should be valued at - ANSWER: $1,400,000
Which of the following sets includes only accounting assumptions and conventions?
a. timeliness, prudence, historical cost, and neutrality
b. matching, comparability, period of time, and faithful representation
c. monetary unit, going concern, relevance, and materiality
d. monetary unit, entity, going concern, and recognition - ANSWER: d. monetary
unit, entity, going concern, and recognition
The state legislature is currently debating a bill that, if passed, would require the
Roberts Company to go out of business. Which of the following principles or
assumptions related to the preparation of Roberts financial statements is most
directly affected by this impending vote of the legislature?
a. going concern
b. verifiability principle
c. entity concept
d. materiality concept - ANSWER: a. going concern
