Full Test Bank for Intermediate Accounting, 11th Edition – Comprehensive Q&A with Verified Answers

Full Test Bank For
Intermediate Accounting, 11th Edition



Answer Key

Test name: chapter 1

1)
TERM PHRASE Term number
that matches
the phrase.
1. Predictive value Information is useful in 1
projecting cash flows.
2. Relevance Pertinent to the decision at 2
hand.
3. Distribution to Information is available prior 5
owners to the decision.
4. Confirmatory Decrease in equity due to 3
value transfers to owners.
5. Timeliness Information confirms 4
expectations.
2)
TERM PHRASE Term number
that matches
the phrase.
1. Gain Along with relevance, a 5
fundamental decision-specific
quality.
2. Materiality Results if an asset is sold for 1
more than book value.
3. Completeness Contains all information 3
necessary for faithful
representation.
4. Comprehensive The change in equity from 4
income nonowner transactions.



Version 1 1

, 5. Faithful Concerns the decision-making 2
representation impact of both the amount and
nature of an item.
3)
TERM PHRASE Term number
that matches
the phrase.
1. Neutrality Important in analysis between 2
firms.
2. Comparability Accounting information should 1
be unbiased.
3. Consistency The decision to include an 5
amount in the financial
statements.
4. Cost-effectiveness Applying the same accounting 3
practices over time.
5. Recognition Considers the value of using 4
information relative to cost of
providing it.
4)
TERM PHRASE Term number q q



that matchesq



qthe phrase.
q




1. Monetary unit
q Implies consensus among
q q 2
qassumption different observers.
q




2. Verifiability Assumes all transactions can be
q q q q 3
identified with a particular
q q q q



entity.
3. Economic entity
q Assumes an entity will continue
q q q q 4
qassumption to operate indefinitely.
q q




4. Going concern
q Requires reporting the
q q 5
qassumption financial life of an entity in
q q q q q q



discrete time frames.
q q




5. Periodicity Ignores the possibility of
q q q 1
qassumption inflation.
5)
TERM PHRASE Term numberq



that matches
q



the phrase.
q




1. Historical cost
q Basis of measurement for fixed
q q q q 1


Version 1 2

, assets.
2. Materiality Discounts future cash flows. q q q 5
3. Revenue q Occurs when goods or services
q q q q 3
recognition are transferred to the
q q q q



customer.
4. Full disclosure
q Reporting of all information q q q 4
that could affect decisions.
q q q




5. Present value q Application of GAAP sometimes q q q 2
avoided under this constraint. q q q




6)
TERM PHRASE Term number q q



that matches
q



qthe phrase.
q




1. Financial q Undermines representational q 3
Accounting Standards q faithfulness by being q q q



qBoard inconsistent with neutrality. q q




2. Accounting q It established GAAP before the
q q q q 2
Principles Board q FASB.
3. Conservatism Its EITF Issues are GAAP when
q q q q q 1
entered in the Accounting q q q q



Standards Codification. q




4. American q It has the authority to set U.S.
q q q q q q 5
Institute of CPAs q q accounting standards. q



q(AICPA)
5. Securities and q q It is the national organization
q q q q 4
Exchange Commission
q for CPAs in the United States.
q q q q q




7)
TERM PHRASE Term number q q



that matchesq



qthe phrase.
q




1. Expenses Net assets. 2
2. Equity Outflows of resources to 1
generate revenues.
3. Distributions to Cash dividends. 3
owners
4. Investments by q Claims of creditors against q q q 5
qowners the assets of a business.
q q q q




5. Liabilities Transfers of resources in q q q 4
exchange for common and q q q q



preferred stock. q




Version 1 3

, 8)
TERM PHRASE Term numberq q



that matches
q



qthe phrase.
q




1. Losses Net outflows from peripheral
q q q 1
transactions.
2. Assets Increases in equity from the q q q q 3
sale of goods and/or services.
q q q q




3. Revenues Results if an asset is sold for
q q q q q q 5
more than book value.
q q q




4. Comprehensive All changes in equity except
q q q q 4
qincome owner transactions. q




5. Gains Probable future economic q q 2
benefits controlled by an q q q q



entity.
9)
TERM PHRASE Term numberq q



that matches
q



qthe phrase.
q




1. SEC Establishes auditing standards in q q q 6
the U.S. for public companies.
q q q q




2. FASB Primary national organization of
q q q 7
accountants working in industry. q q q




3. IASB Sets accounting standards in the
q q q q 2
United States.
q




4. AICPA Provides timely responses to
q q q 5
financial reporting issues.q q




5. EITF The FASB's parent organization.
q q q 10
6. PCAOB Advises the FASB.
q q 8
7. IMA FASB's predecessor.
q 9
8. FASAC Regulates the financial reporting
q q q 1
for public companies.
q q




9. APB National organization of certified
q q q 4
public accountants.
q




10. FAF Sets global accounting standards.
q q q 3




Version 1 4