Question 1

Lenders monitor financial statement data to ascertain whether borrowers are adhering to,or violating,loan covenants.

Accepted Answer

A) True 
 B)False

Question 2

Companies offering higher risk securities have incentives to mask their true condition by

Accepted Answer

A) supplying overly optimistic financial information. 
B) not having their financial statements audited. 
C) listing on foreign exchanges where reporting requirements are less stringent than those in the U.S. 
D) including testimonials from well known executives in their financial statements. 
A) supplying overly optimistic financial information. 
B) not having their financial statements audited. 
C) listing on foreign exchanges where reporting requirements are less stringent than those in the U.S. 
D) including testimonials from well known executives in their financial statements.

Question 3

Companies judged to be high credit risks may be subject to loan covenants.

Accepted Answer

A) True 
 B)False

Question 4

The Financial Accounting Standards Board has responsibility for the establishment of U.S.accounting standards and

Accepted Answer

A) full statutory power to enforce compliance with GAAP. 
B) authority from the SEC to enforce compliance with GAAP. 
C) no authority or responsibility to enforce compliance with GAAP. 
D) responsibility imposed by AICPA to enforce compliance with GAAP. 
A) full statutory power to enforce compliance with GAAP. 
B) authority from the SEC to enforce compliance with GAAP. 
C) no authority or responsibility to enforce compliance with GAAP. 
D) responsibility imposed by AICPA to enforce compliance with GAAP.

Question 5

Creditors assess credit risk by comparing a firm's required principal and interest payments to estimates of the firm's current and future

Accepted Answer

A) net assets. 
B) gross income. 
C) net income. 
D) cash flows. 
A) net assets. 
B) gross income. 
C) net income. 
D) cash flows.

Question 6

IFRS are frequently much more detailed than their U.S.GAAP counterpart standards.

Accepted Answer

A) True 
 B)False

Question 7

Using the same accounting methods for a company to record and report similar events from period to period demonstrates faithful representation.

Accepted Answer

A) True 
 B)False

Question 8

Financial information capable of making a difference in a decision is

Accepted Answer

A) relevant. 
B) verifiable. 
C) consistent. 
D) neutral. 
A) relevant. 
B) verifiable. 
C) consistent. 
D) neutral.

Question 9

All financial statements provide a basis for what might occur in the future.

Accepted Answer

A) True 
 B)False

Question 10

To efficient market investors,financial statement data provide a basis for assessing risk,dividend yield,or other firm attributes that are important to portfolio selection decisions.

Accepted Answer

A) True 
 B)False

Question 11

It is common for shareholders to initiate litigation when

Accepted Answer

A) the company reports record profits,but does not declare dividends. 
B) there's a sudden drop in stock price. 
C) the company introduces new products that are found to be harmful to the environment. 
D) rumors about the company appear in the media that,if true,would result in slower growth in future profits. 
A) the company reports record profits,but does not declare dividends. 
B) there's a sudden drop in stock price. 
C) the company introduces new products that are found to be harmful to the environment. 
D) rumors about the company appear in the media that,if true,would result in slower growth in future profits.

Question 12

Broadly defined,the term "analyst" includes anyone who uses financial statements to make decisions as part of their job.

Accepted Answer

A) True 
 B)False

Question 13

The "quality of information" as applied to financial reporting refers to the degree to which financial statements are grounded in facts and sound judgments and thus are free from distortion.

Accepted Answer

A) True 
 B)False

Question 14

Fair value accounting is widely touted as a means to avoid future financial crises as it will prevent banks from collapsing.

Accepted Answer

A) True 
 B)False

Question 15

The goal of the growing movement toward international convergence of accounting standards is a single set of accounting standards accepted worldwide and superior to the choices presently available.

Accepted Answer

A) True 
 B)False

Question 16

The SEC passed Regulation Fair Disclosure (Reg FD)to ensure that financial statement users have access to all the financial information they need to make decisions.

Accepted Answer

A) True 
 B)False

Question 17

Using the same accounting methods to record and report similar events from period to period demonstrates

Accepted Answer

A) consistency. 
B) comparability. 
C) neutrality. 
D) faithful representation. 
A) consistency. 
B) comparability. 
C) neutrality. 
D) faithful representation.

Question 18

A tremendous amount of time,money,and effort are spent on the compilation of quarterly and yearly financial reports.Correspondingly,they attract a lot of attention and scrutiny.Explain the role and importance of financial reports in capital markets.

Accepted Answer

Financial reports provide rele

Question 19

Owners and managers have an economic incentive to supply the amount and type of financial information that will enable the company to raise capital at the lowest cost.

Accepted Answer

A) True 
 B)False

Question 20

The costs of providing financial information is ultimately borne by

Accepted Answer

A) management. 
B) shareholders. 
C) auditors. 
D) professional analysts. 
A) management. 
B) shareholders. 
C) auditors. 
D) professional analysts.

Lenders monitor financial statement data to ascertain whether borrowers are adhering to,or violating,loan covenants.

Companies offering higher risk securities have incentives to mask their true condition by

Companies judged to be high credit risks may be subject to loan covenants.

The Financial Accounting Standards Board has responsibility for the establishment of U.S.accounting standards and

Creditors assess credit risk by comparing a firm's required principal and interest payments to estimates of the firm's current and future

IFRS are frequently much more detailed than their U.S.GAAP counterpart standards.

Using the same accounting methods for a company to record and report similar events from period to period demonstrates faithful representation.

Financial information capable of making a difference in a decision is

All financial statements provide a basis for what might occur in the future.

To efficient market investors,financial statement data provide a basis for assessing risk,dividend yield,or other firm attributes that are important to portfolio selection decisions.

It is common for shareholders to initiate litigation when

Broadly defined,the term "analyst" includes anyone who uses financial statements to make decisions as part of their job.

The "quality of information" as applied to financial reporting refers to the degree to which financial statements are grounded in facts and sound judgments and thus are free from distortion.

Fair value accounting is widely touted as a means to avoid future financial crises as it will prevent banks from collapsing.

The goal of the growing movement toward international convergence of accounting standards is a single set of accounting standards accepted worldwide and superior to the choices presently available.

The SEC passed Regulation Fair Disclosure (Reg FD)to ensure that financial statement users have access to all the financial information they need to make decisions.

Using the same accounting methods to record and report similar events from period to period demonstrates

A tremendous amount of time,money,and effort are spent on the compilation of quarterly and yearly financial reports.Correspondingly,they attract a lot of attention and scrutiny.Explain the role and importance of financial reports in capital markets.

Owners and managers have an economic incentive to supply the amount and type of financial information that will enable the company to raise capital at the lowest cost.

The costs of providing financial information is ultimately borne by

Accrual Accounting and Income Determination

Additional Topics in Income Determination

Structure of the Balance Sheet and Statement of Cash Flows

Essentials of Financial Statement Analysis

The Role of Financial Information in Valuation and Credit Risk Assessment

The Role of Financial Information in Contracting

Receivables

Inventories

Long-Lived Assets

Financial Instruments As Liabilities

Financial Reporting for Leases

Income Tax Reporting

Pensions and Postretirement Benefits

Financial Reporting for Owners Equity

Intercorporate Equity Investments

Statement of Cash Flows

Filters

Exam 1: The Economic and Institutional Setting for Financial Reporting

Lenders monitor financial statement data to ascertain whether borrowers are adhering to,or violating,loan covenants.

Companies offering higher risk securities have incentives to mask their true condition by

Companies judged to be high credit risks may be subject to loan covenants.

The Financial Accounting Standards Board has responsibility for the establishment of U.S.accounting standards and

Creditors assess credit risk by comparing a firm's required principal and interest payments to estimates of the firm's current and future

IFRS are frequently much more detailed than their U.S.GAAP counterpart standards.

Using the same accounting methods for a company to record and report similar events from period to period demonstrates faithful representation.

Financial information capable of making a difference in a decision is

All financial statements provide a basis for what might occur in the future.

To efficient market investors,financial statement data provide a basis for assessing risk,dividend yield,or other firm attributes that are important to portfolio selection decisions.

It is common for shareholders to initiate litigation when

Broadly defined,the term "analyst" includes anyone who uses financial statements to make decisions as part of their job.

The "quality of information" as applied to financial reporting refers to the degree to which financial statements are grounded in facts and sound judgments and thus are free from distortion.

Fair value accounting is widely touted as a means to avoid future financial crises as it will prevent banks from collapsing.

The goal of the growing movement toward international convergence of accounting standards is a single set of accounting standards accepted worldwide and superior to the choices presently available.

The SEC passed Regulation Fair Disclosure (Reg FD)to ensure that financial statement users have access to all the financial information they need to make decisions.

Using the same accounting methods to record and report similar events from period to period demonstrates

A tremendous amount of time,money,and effort are spent on the compilation of quarterly and yearly financial reports.Correspondingly,they attract a lot of attention and scrutiny.Explain the role and importance of financial reports in capital markets.

Owners and managers have an economic incentive to supply the amount and type of financial information that will enable the company to raise capital at the lowest cost.

The costs of providing financial information is ultimately borne by

Accrual Accounting and Income Determination

Additional Topics in Income Determination

Structure of the Balance Sheet and Statement of Cash Flows

Essentials of Financial Statement Analysis

The Role of Financial Information in Valuation and Credit Risk Assessment

The Role of Financial Information in Contracting

Receivables

Inventories

Long-Lived Assets

Financial Instruments As Liabilities

Financial Reporting for Leases

Income Tax Reporting

Pensions and Postretirement Benefits

Financial Reporting for Owners Equity

Intercorporate Equity Investments

Statement of Cash Flows

Filters