Question 1

The FASB is currently the public-sector organization responsible for setting accounting standards in the United States.

Accepted Answer

A) True 
 B)False  False

Question 2

The periodicity assumption requires that present value calculations take into account the number of compounding periods in each year.

Accepted Answer

A) True 
 B)False  False

Question 3

"Condorsement":

Accepted Answer

A) Is a term used by the IASB to refer to the conditional endorsement process used by the EU with respect to IFRS. 
B) Describes a combination of convergence and endorsement that the SEC suggested the United States might use in the future to incorporate IFRS into U.S.GAAP. 
C) Was coined by a representative of the AICPA to describe the lengthy convergence process. 
D) Has nothing to do with the convergence process. 
A) Is a term used by the IASB to refer to the conditional endorsement process used by the EU with respect to IFRS. 
B) Describes a combination of convergence and endorsement that the SEC suggested the United States might use in the future to incorporate IFRS into U.S.GAAP. 
C) Was coined by a representative of the AICPA to describe the lengthy convergence process. 
D) Has nothing to do with the convergence process. B

Question 4

The primary function of financial accounting is to provide relevant financial information to parties external to business enterprises.

Accepted Answer

A) True 
 B)False

Question 5

If a company has declared bankruptcy, its financial statements likely violate:

Accepted Answer

A) The matching principle. 
B) The realization principle. 
C) The stable monetary unit assumption. 
D) The going concern assumption. 
A) The matching principle. 
B) The realization principle. 
C) The stable monetary unit assumption. 
D) The going concern assumption.

Question 6

According to the FASB's Statements of Financial Accounting Concepts, conservatism is a desired qualitative characteristic of accounting information.

Accepted Answer

A) True 
 B)False

Question 7

Primecoat Corporation could disseminate its annual financial statements two days earlier if it shifted substantial human resources from other operations to the annual report project. Management decided the value of the earlier report was not worth the added commitment of resources. The concept demonstrated is:

Accepted Answer

A) Timeliness. 
B) Materiality. 
C) Relevance. 
D) Cost-effectiveness. 
A) Timeliness. 
B) Materiality. 
C) Relevance. 
D) Cost-effectiveness.

Question 8

Compute Amazon's balance in cash at the beginning of the year.

Accepted Answer

Beginning balance in Cash + Ne

Question 9

Fundamental qualitative characteristics of accounting information are:

Accepted Answer

A) Relevance and comparability. 
B) Comparability and consistency. 
C) Faithful representation and relevance. 
D) Neutrality and consistency. 
A) Relevance and comparability. 
B) Comparability and consistency. 
C) Faithful representation and relevance. 
D) Neutrality and consistency.

Question 10

A cause-and-effect relationship is implicit in the:

Accepted Answer

A) Realization principle. 
B) Historical cost principle. 
C) Matching principle. 
D) Going concern assumption. 
A) Realization principle. 
B) Historical cost principle. 
C) Matching principle. 
D) Going concern assumption.

Question 11

A firm's comprehensive income always:

Accepted Answer

A) Is the same as its net income. 
B) Is greater than its net income. 
C) Is less than its net income. 
D) Could be greater than or less than net income. 
A) Is the same as its net income. 
B) Is greater than its net income. 
C) Is less than its net income. 
D) Could be greater than or less than net income.

Question 12

The primary historical reason for the FASB reversing its positions when political pressures occur is:

Accepted Answer

A) The cost of gathering data was prohibitive. 
B) The difficulties in measurement were too great. 
C) They have no authority in such situations. 
D) The SEC did not support the FASB position. 
A) The cost of gathering data was prohibitive. 
B) The difficulties in measurement were too great. 
C) They have no authority in such situations. 
D) The SEC did not support the FASB position.

Question 13

Land was acquired in 2013 for a future building site at a cost of $40,000. The assessed valuation for tax purposes is $27,000, a qualified appraiser placed its value at $48,000, and a recent firm offer for the land was for a cash payment of $46,000. The land should be reported in the financial statements at:

Accepted Answer

A) $40,000. 
B) $27,000. 
C) $46,000. 
D) $48,000. 
A) $40,000. 
B) $27,000. 
C) $46,000. 
D) $48,000.

Question 14

Accounting standard setting has been characterized as:

Accepted Answer

A) A political process. 
B) Using the scientific method. 
C) Pure deductive reasoning. 
D) Pure inductive reasoning. 
A) A political process. 
B) Using the scientific method. 
C) Pure deductive reasoning. 
D) Pure inductive reasoning.

Question 15

Identify or define the following terms: historical cost, realization.

Accepted Answer

Historical cost-A measurement attribute

Question 16

The most political issue in the FASB's most recent deliberations and amendments to GAAP on business combinations was:

Accepted Answer

A) The negative effects on subsequent earnings of amortizing goodwill if firms were required to use the purchase method of accounting for the combination. 
B) The negative effects on subsequent earnings of amortizing goodwill if firms were required to use the pooling method of accounting for the combination. 
C) The unrealistic balance sheet assets that would be created if firms were required to use the purchase method of accounting for the combination. 
D) The unrealistic balance sheet assets that would be created if firms were required to use the pooling method of accounting for the combination. 
A) The negative effects on subsequent earnings of amortizing goodwill if firms were required to use the purchase method of accounting for the combination. 
B) The negative effects on subsequent earnings of amortizing goodwill if firms were required to use the pooling method of accounting for the combination. 
C) The unrealistic balance sheet assets that would be created if firms were required to use the purchase method of accounting for the combination. 
D) The unrealistic balance sheet assets that would be created if firms were required to use the pooling method of accounting for the combination.

Question 17

When there is agreement between a measure or description and the phenomenon it purports to represent, information possesses which characteristic?

Accepted Answer

A) Verifiability. 
B) Predictive value. 
C) Faithful representation. 
D) Timeliness. 
A) Verifiability. 
B) Predictive value. 
C) Faithful representation. 
D) Timeliness.

Question 18

Under federal securities laws, the SEC has the authority to set accounting standards in the United States.

Accepted Answer

A) True 
 B)False

Question 19

The assumption that in the absence of contrary information a business entity will continue indefinitely is the:

Accepted Answer

A) Periodicity assumption. 
B) Entity assumption. 
C) Going concern assumption. 
D) Historical cost assumption. 
A) Periodicity assumption. 
B) Entity assumption. 
C) Going concern assumption. 
D) Historical cost assumption.

Question 20

GAAP is an abbreviation for:

Accepted Answer

A) Generally authorized accounting procedures. 
B) Generally applied accounting procedures. 
C) Generally accepted auditing practices. 
D) Generally accepted accounting principles. 
A) Generally authorized accounting procedures. 
B) Generally applied accounting procedures. 
C) Generally accepted auditing practices. 
D) Generally accepted accounting principles.

The FASB is currently the public-sector organization responsible for setting accounting standards in the United States.

The periodicity assumption requires that present value calculations take into account the number of compounding periods in each year.

"Condorsement":

The primary function of financial accounting is to provide relevant financial information to parties external to business enterprises.

If a company has declared bankruptcy, its financial statements likely violate:

According to the FASB's Statements of Financial Accounting Concepts, conservatism is a desired qualitative characteristic of accounting information.

Compute Amazon's balance in cash at the beginning of the year.

Fundamental qualitative characteristics of accounting information are:

A cause-and-effect relationship is implicit in the:

A firm's comprehensive income always:

The primary historical reason for the FASB reversing its positions when political pressures occur is:

Accounting standard setting has been characterized as:

Identify or define the following terms: historical cost, realization.

The most political issue in the FASB's most recent deliberations and amendments to GAAP on business combinations was:

When there is agreement between a measure or description and the phenomenon it purports to represent, information possesses which characteristic?

Under federal securities laws, the SEC has the authority to set accounting standards in the United States.

The assumption that in the absence of contrary information a business entity will continue indefinitely is the:

GAAP is an abbreviation for:

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Income Measurement and Profitability Analysis

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity Key

Share-Based Compensation and Earnings Per Share

Accounting Changes and Error Corrections

The Statement of Cash Flows Revisited

Filters

Exam 1: Environment and Theoretical Structure of Financial Accounting

The FASB is currently the public-sector organization responsible for setting accounting standards in the United States.

The periodicity assumption requires that present value calculations take into account the number of compounding periods in each year.

"Condorsement":

The primary function of financial accounting is to provide relevant financial information to parties external to business enterprises.

If a company has declared bankruptcy, its financial statements likely violate:

According to the FASB's Statements of Financial Accounting Concepts, conservatism is a desired qualitative characteristic of accounting information.

Compute Amazon's balance in cash at the beginning of the year.

Fundamental qualitative characteristics of accounting information are:

A cause-and-effect relationship is implicit in the:

A firm's comprehensive income always:

The primary historical reason for the FASB reversing its positions when political pressures occur is:

Accounting standard setting has been characterized as:

Identify or define the following terms: historical cost, realization.

The most political issue in the FASB's most recent deliberations and amendments to GAAP on business combinations was:

When there is agreement between a measure or description and the phenomenon it purports to represent, information possesses which characteristic?

Under federal securities laws, the SEC has the authority to set accounting standards in the United States.

The assumption that in the absence of contrary information a business entity will continue indefinitely is the:

GAAP is an abbreviation for:

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Income Measurement and Profitability Analysis

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity Key

Share-Based Compensation and Earnings Per Share

Accounting Changes and Error Corrections

The Statement of Cash Flows Revisited

Filters