WileyPlus Orion: Financial Accounting & Accounting
Standards - Questions With Correct Solutions
Ted has come across a situation while preparing the financial statements for
his company. He knows what the GAAP requirements are, but his boss wants
him to understate expenses. What is this an example of? Correct Answer -
an ethical dilemma
Kaitlyn runs a U.S. company that often does a lot of business with companies
in London and Ireland. Sean runs a company in London that often does
business with many companies in the U.S. What is implied here about their
reporting standards? Correct Answer - Kaitlyn will likely use GAAP,
whereas Sean will likely use IFRS.
Runa runs a company in Norway that is listed with the U.S exchange. What
accounting standards will Runa's company use? Correct Answer - IFRS
How are FASB and GAAP related when it comes to user groups? Correct
Answer - User groups often pressure the FASB to influence GAAP.
Paul is an accountant at a company that has recently issued its financial
statements. The public feels that more information should be included in the
statements, but Paul believes that he and the other accountants provided all of
the information that they could. What is this an example of? Correct Answer
- the expectations gap
How are the codification and GAAP similar to one another? Correct Answer
- The codification works to omit any redundancies within GAAP.
What is the connection between the Wheat Committee and the APB?
Correct Answer - The Wheat Committee ultimately led to the replacement of
the APB.
How are the SEC and GAAP related to one another? Correct Answer - The
SEC requires companies to follow GAAP.
Morris is part of a government organization that is responsible for
standardizing the information that companies present to stockholders. He
, reviews the financial reports from multiple companies within this
organization's jurisdiction. What organization does Morris work for?
Correct Answer - the SEC
Carolyn is looking over published accounting opinions based primarily on
research studies. What organization is Carolyn researching? Correct
Answer - APB
What would happen if GAAP was no longer used? Correct Answer - It
would be almost impossible to compare financial statements.
Which of the following would be an example of a user looking at general-
purpose financial statements? Correct Answer - Tom is looking at a set of
documents for a company he wants to invest in; the information is presented
clearly and all aspects of the company's financial operations are mentioned.
Mara prepares the financial reports for her company. The assets in the reports
are distinct from those of shareholders. Ben believes that financial reports
should be tailored primarily toward shareholders. What is implied here?
Correct Answer - Mara is following the entity perspective, whereas Ben is
following the proprietary perspective.
Pam prepares the financial reports for her company. The company has a
number of assets that are listed on the reports, but the assets of individual
shareholders are considered to be distinct from the company itself and are not
included. What is this an example of? Correct Answer - the entity
perspective
What is the difference between effective capital allocation and poor capital
allocation? Correct Answer - Effective capital allocation leads to a healthy
economy, whereas poor capital allocation can negatively affect the securities
market.
Dave is an investor interested in buying shares in a new company. He is
currently analyzing financial reports to make his decisions. What is this an
example of? Correct Answer - a user
Maci is preparing the income statement for her company. Jon is preparing a
report that needs to be filed with one of the government agencies the
Standards - Questions With Correct Solutions
Ted has come across a situation while preparing the financial statements for
his company. He knows what the GAAP requirements are, but his boss wants
him to understate expenses. What is this an example of? Correct Answer -
an ethical dilemma
Kaitlyn runs a U.S. company that often does a lot of business with companies
in London and Ireland. Sean runs a company in London that often does
business with many companies in the U.S. What is implied here about their
reporting standards? Correct Answer - Kaitlyn will likely use GAAP,
whereas Sean will likely use IFRS.
Runa runs a company in Norway that is listed with the U.S exchange. What
accounting standards will Runa's company use? Correct Answer - IFRS
How are FASB and GAAP related when it comes to user groups? Correct
Answer - User groups often pressure the FASB to influence GAAP.
Paul is an accountant at a company that has recently issued its financial
statements. The public feels that more information should be included in the
statements, but Paul believes that he and the other accountants provided all of
the information that they could. What is this an example of? Correct Answer
- the expectations gap
How are the codification and GAAP similar to one another? Correct Answer
- The codification works to omit any redundancies within GAAP.
What is the connection between the Wheat Committee and the APB?
Correct Answer - The Wheat Committee ultimately led to the replacement of
the APB.
How are the SEC and GAAP related to one another? Correct Answer - The
SEC requires companies to follow GAAP.
Morris is part of a government organization that is responsible for
standardizing the information that companies present to stockholders. He
, reviews the financial reports from multiple companies within this
organization's jurisdiction. What organization does Morris work for?
Correct Answer - the SEC
Carolyn is looking over published accounting opinions based primarily on
research studies. What organization is Carolyn researching? Correct
Answer - APB
What would happen if GAAP was no longer used? Correct Answer - It
would be almost impossible to compare financial statements.
Which of the following would be an example of a user looking at general-
purpose financial statements? Correct Answer - Tom is looking at a set of
documents for a company he wants to invest in; the information is presented
clearly and all aspects of the company's financial operations are mentioned.
Mara prepares the financial reports for her company. The assets in the reports
are distinct from those of shareholders. Ben believes that financial reports
should be tailored primarily toward shareholders. What is implied here?
Correct Answer - Mara is following the entity perspective, whereas Ben is
following the proprietary perspective.
Pam prepares the financial reports for her company. The company has a
number of assets that are listed on the reports, but the assets of individual
shareholders are considered to be distinct from the company itself and are not
included. What is this an example of? Correct Answer - the entity
perspective
What is the difference between effective capital allocation and poor capital
allocation? Correct Answer - Effective capital allocation leads to a healthy
economy, whereas poor capital allocation can negatively affect the securities
market.
Dave is an investor interested in buying shares in a new company. He is
currently analyzing financial reports to make his decisions. What is this an
example of? Correct Answer - a user
Maci is preparing the income statement for her company. Jon is preparing a
report that needs to be filed with one of the government agencies the
