TEST BANK For Gordon, Intermediate Accounting 3rd Edition, Verified Chapters 1 - 22, Complete Newest Version

,Intermediate Accounting, 3e (Gordon/Raedy/Sannella)
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Chapter 1 The Financial Reporting Environment
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1.1 Overview of Financial Reporting sx sx sx




1) The financial reporting process generates three basic financial statement
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s. Answer: FALSE
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Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

2) The demand for financial information is based on market participant deman
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d. Answer: TRUE
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

3) Managers of economic entities are best considered to be users of financial informati
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on. Answer: FALSE
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

4) Managers of economic entities are best considered to be preparers of financial informati
sx sx sx sx sx sx sx sx sx sx sx sx


on. Answer: TRUE
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly trad
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ed companies.
sx


Answer: TRUE s x s x


Diff:sx2
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP
AACSB:s x s x Applicationsxofsxknowledge

6) The FASB gives the SEC authority to regulate accounting for publicly traded compani
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es. Answer: FALSE
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP
AACSB:s x s x Applicationsxofsxknowledge




1
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,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards a
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nd oversees the audits of public companies in the United States.
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Answer: FALSE s x s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP
AACSB:s x s x Applicationsxofsxknowledge

8) Financial accounting standards influence the behavior of managers and other internal use
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rs. Answer: TRUE
sx s x


Diff:sx2
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

9) Theories and procedures that evolve as a result of lobbying from various groups are example
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s of proactive factors within the legal, economic, political, and social environment.
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Answer: FALSE s x s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

10) Financial information includes information that is not governed by rules set forth by the account
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ing standard-setting bodies.
sx sx


Answer: TRUE s x s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

11) What is the term that describes the process of identifying, measuring, and communicating finan
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cial information about an economic entity to various user groups?
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A) financial reporting sx


B) accounting standard setting sx sx


C) financial statement sx


D) financial accounting sx


Answer: D
sx s x


Diff:sx2
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge




2
Copyright © 2022 Pearson Education, Inc.
sx sx sx sx sx

, 12) Which element of financial accounting involves identifying the individuals who demand financ
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ial information?
sx


A) financial information sx


B) economic entity sx


C) user groups sx


D) legal, economic, political, and social environmen
sx sx sx sx sx


t Answer: C
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

13) Which of the following is not one of the four basic financial statements?
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A) balance sheet sx


B) trial balancesx


C) cash flows statement
sx sx


D) statement of comprehensive income sx sx sx


Answer: B
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

14) Which organization is responsible for promulgating U.S. GAAP?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) International Accounting Standards Board sx sx sx


D) Securities and Exchange Commission sx sx sx


Answer: A
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP/IFRS
AACSB:s x s x Applicationsxofsxknowledge

15) Which organization is responsible for setting auditing standards and overseeing the audits of pu
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blic companies in the United States?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) American Institute of Certified Public Accountants
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D) Securities and Exchange Commission sx sx sx


Answer: B
sx s x


Diff:sx1
Objective:s x 1.1sxIFRS/GA
AP:s x GAAP
AACSB:s x s x Applicationsxofsxknowledge




3
Copyright © 2022 Pearson Education, Inc.
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