Intermediate Accounting - Chapter 1 Quiz
Fernblatt Inc. recognizes revenue in the period in which it records an asset for the related
account receivable, rather than in the period in which the account receivable is collected in
cash. Fernblatt's accounting approach is an example of: - ANS-Accrual accounting.
\Financial statements generally include all of the following except: - ANS-federal income tax
return
\GAAP includes which of the following pronouncements:
Statements of Financial Accounting Standards.
Accounting Research Bulletins.
Accounting Principles Board Opinions.
All of the choices are correct. - ANS-all choices are correct
\In general, revenue is recognized when the earnings process is virtually complete and: -
ANS-Goods or services are transferred to the customer.
\Relevance requires that information possess predictive and/or: - ANS-Confirmatory value.
\The documents that set forth fundamental concepts on which financial accounting and reporting
standards will be based are: - ANS-Statements of Financial Accounting Concepts.
\The main objective of the IASB is to: - ANS-Develop a single set of global accounting
standards.
\The primary objective of financial reporting is to provide information: - ANS-that is useful in
decision making
\The qualitative characteristic that means there is agreement between a measure and a
real-world phenomenon is: - ANS-Representational faithfulness.
\The SEC exerts a continuing influence on the establishment of accounting standards. It does
so primarily by: - ANS-Monitoring the development of GAAP within the accounting profession
and using its stature to influence that development.
\The two primary decision-specific qualities that make accounting information useful are: -
ANS-Relevance and faithful representation.
\The type of financial information to external decision makers is referred to as: - ANS-financial
accounting
\The underlying assumption that assumes that the life of a company can be divided into artificial
time periods is: - ANS-Periodicity.
\The underlying assumption that presumes a company will continue indefinitely is: - ANS-Going
concern.
\Which of the following characteristics does not describe a liability? - ANS-Must be legally
enforceable.
\Which of the following characteristics does not describe an asset? - ANS-Requires the receipt
of cash.
\Which of the following is considered a practical constraint on the qualitative characteristics? -
ANS-Cost effectiveness.
\
Fernblatt Inc. recognizes revenue in the period in which it records an asset for the related
account receivable, rather than in the period in which the account receivable is collected in
cash. Fernblatt's accounting approach is an example of: - ANS-Accrual accounting.
\Financial statements generally include all of the following except: - ANS-federal income tax
return
\GAAP includes which of the following pronouncements:
Statements of Financial Accounting Standards.
Accounting Research Bulletins.
Accounting Principles Board Opinions.
All of the choices are correct. - ANS-all choices are correct
\In general, revenue is recognized when the earnings process is virtually complete and: -
ANS-Goods or services are transferred to the customer.
\Relevance requires that information possess predictive and/or: - ANS-Confirmatory value.
\The documents that set forth fundamental concepts on which financial accounting and reporting
standards will be based are: - ANS-Statements of Financial Accounting Concepts.
\The main objective of the IASB is to: - ANS-Develop a single set of global accounting
standards.
\The primary objective of financial reporting is to provide information: - ANS-that is useful in
decision making
\The qualitative characteristic that means there is agreement between a measure and a
real-world phenomenon is: - ANS-Representational faithfulness.
\The SEC exerts a continuing influence on the establishment of accounting standards. It does
so primarily by: - ANS-Monitoring the development of GAAP within the accounting profession
and using its stature to influence that development.
\The two primary decision-specific qualities that make accounting information useful are: -
ANS-Relevance and faithful representation.
\The type of financial information to external decision makers is referred to as: - ANS-financial
accounting
\The underlying assumption that assumes that the life of a company can be divided into artificial
time periods is: - ANS-Periodicity.
\The underlying assumption that presumes a company will continue indefinitely is: - ANS-Going
concern.
\Which of the following characteristics does not describe a liability? - ANS-Must be legally
enforceable.
\Which of the following characteristics does not describe an asset? - ANS-Requires the receipt
of cash.
\Which of the following is considered a practical constraint on the qualitative characteristics? -
ANS-Cost effectiveness.
\
