Question 1

An effective capital allocation process

Accepted Answer

A) promotes productivity. 
B) encourages innovation. 
C) provides an efficient market for buying and selling securities. 
D) all of these. 
A) promotes productivity. 
B) encourages innovation. 
C) provides an efficient market for buying and selling securities. 
D) all of these. D

Question 2

The information provided by financial reporting pertains to

Accepted Answer

A) individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers. 
B) business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers. 
C) individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers. 
D) an economy as a whole and to members of society as consumers, rather than to individual enterprises or industries. 
A) individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers. 
B) business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers. 
C) individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers. 
D) an economy as a whole and to members of society as consumers, rather than to individual enterprises or industries. A

Question 3

The Securities and Exchange Commission appointed the Committee on Accounting Procedure.

Accepted Answer

A) True 
 B)False  False

Question 4

Generally accepted accounting principles

Accepted Answer

A) include detailed practices and procedures as well as broad guidelines of general application. 
B) are influenced by pronouncements of the SEC and IRS. 
C) change over time as the nature of the business environment changes. 
D) all of these. 
A) include detailed practices and procedures as well as broad guidelines of general application. 
B) are influenced by pronouncements of the SEC and IRS. 
C) change over time as the nature of the business environment changes. 
D) all of these.

Question 5

The most authoritative category of generally accepted accounting principles includes all of the following except

Accepted Answer

A) Accounting Research Bulletins. 
B) APB Opinions. 
C) FASB Standards. 
D) FASB Technical Bulletins. 
A) Accounting Research Bulletins. 
B) APB Opinions. 
C) FASB Standards. 
D) FASB Technical Bulletins.

Question 6

The role of the Securities and Exchange Commission in the formulation of accounting principles can be best described as

Accepted Answer

A) consistently primary. 
B) consistently secondary. 
C) sometimes primary and sometimes secondary. 
D) non-existent. 
A) consistently primary. 
B) consistently secondary. 
C) sometimes primary and sometimes secondary. 
D) non-existent.

Question 7

A common set of accounting standards and procedures are called

Accepted Answer

A) financial accounting standards. 
B) generally accepted accounting principles. 
C) objectives of financial reporting. 
D) statements of financial accounting concepts. 
A) financial accounting standards. 
B) generally accepted accounting principles. 
C) objectives of financial reporting. 
D) statements of financial accounting concepts.

Question 8

Accounting standards are a product of careful logic or empirical findings and are not influenced by political action.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is not an objective of financial reporting?

Accepted Answer

A) Provide information that is useful in investment and credit decisions. 
B) Provide information about enterprise resources, claims to those resources, and changes to them. 
C) Provide information on the liquidation value of an enterprise. 
D) Provide information that is useful in assessing cash flow prospects. 
A) Provide information that is useful in investment and credit decisions. 
B) Provide information about enterprise resources, claims to those resources, and changes to them. 
C) Provide information on the liquidation value of an enterprise. 
D) Provide information that is useful in assessing cash flow prospects.

Question 10

General-purpose financial statements are the product of

Accepted Answer

A) financial accounting. 
B) managerial accounting. 
C) both financial and managerial accounting. 
D) neither financial nor managerial accounting. 
A) financial accounting. 
B) managerial accounting. 
C) both financial and managerial accounting. 
D) neither financial nor managerial accounting.

Question 11

The most significant current source of generally accepted accounting principles is the

Accepted Answer

A) AICPA. 
B) SEC. 
C) APB. 
D) FASB. 
A) AICPA. 
B) SEC. 
C) APB. 
D) FASB.

Question 12

Users of the financial information provided by a company use that information to make capital allocation decisions.

Accepted Answer

A) True 
 B)False

Question 13

Financial accounting standard-setting in the United States

Accepted Answer

A) can be described as a social process which reflects political actions of various interested user groups as well as a product of research and logic. 
B) is based solely on research and empirical findings. 
C) is a legalistic process based on rules promulgated by governmental agencies. 
D) is democratic in the sense that a majority of accountants must agree with a standard before it becomes enforceable. 
A) can be described as a social process which reflects political actions of various interested user groups as well as a product of research and logic. 
B) is based solely on research and empirical findings. 
C) is a legalistic process based on rules promulgated by governmental agencies. 
D) is democratic in the sense that a majority of accountants must agree with a standard before it becomes enforceable.

Question 14

Users of financial reports include all of the following except

Accepted Answer

A) creditors. 
B) government agencies. 
C) unions. 
D) All of these are users. 
A) creditors. 
B) government agencies. 
C) unions. 
D) All of these are users.

Question 15

The Financial Accounting Standards Board (FASB) was proposed by the

Accepted Answer

A) American Institute of Certified Public Accountants. 
B) Accounting Principles Board. 
C) Study Group on the Objectives of Financial Statements. 
D) Special Study Group on establishment of Accounting Principles (Wheat Committee). 
A) American Institute of Certified Public Accountants. 
B) Accounting Principles Board. 
C) Study Group on the Objectives of Financial Statements. 
D) Special Study Group on establishment of Accounting Principles (Wheat Committee).

Question 16

The Financial Accounting Foundation

Accepted Answer

A) oversees the operations of the FASB. 
B) oversees the operations of the AICPA. 
C) provides information to interested parties on financial reporting issues. 
D) works with the Financial Accounting Standards Advisory Council to provide informa-tion to interested parties on financial reporting issues. 
A) oversees the operations of the FASB. 
B) oversees the operations of the AICPA. 
C) provides information to interested parties on financial reporting issues. 
D) works with the Financial Accounting Standards Advisory Council to provide informa-tion to interested parties on financial reporting issues.

Question 17

An organization that has not published accounting standards is the

Accepted Answer

A) American Institute of Certified Public Accountants. 
B) Securities and Exchange Commission. 
C) Financial Accounting Standards Board. 
D) All of these have published accounting standards. 
A) American Institute of Certified Public Accountants. 
B) Securities and Exchange Commission. 
C) Financial Accounting Standards Board. 
D) All of these have published accounting standards.

Question 18

The expectations gap is caused by what the public thinks accountants should be doing and what accountants think they can do.

Accepted Answer

A) True 
 B)False

Question 19

The passage of a new FASB Standards Statement requires the support of five of the seven board members.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following publications does not qualify as a statement of generally accepted accounting principles?

Accepted Answer

A) Statements of financial standards issued by the FASB 
B) Accounting interpretations issued by the FASB 
C) APB Opinions 
D) Accounting research studies issued by the AICPA 
A) Statements of financial standards issued by the FASB 
B) Accounting interpretations issued by the FASB 
C) APB Opinions 
D) Accounting research studies issued by the AICPA

An effective capital allocation process

The information provided by financial reporting pertains to

The Securities and Exchange Commission appointed the Committee on Accounting Procedure.

Generally accepted accounting principles

The most authoritative category of generally accepted accounting principles includes all of the following except

The role of the Securities and Exchange Commission in the formulation of accounting principles can be best described as

A common set of accounting standards and procedures are called

Accounting standards are a product of careful logic or empirical findings and are not influenced by political action.

Which of the following statements is not an objective of financial reporting?

General-purpose financial statements are the product of

The most significant current source of generally accepted accounting principles is the

Users of the financial information provided by a company use that information to make capital allocation decisions.

Financial accounting standard-setting in the United States

Users of financial reports include all of the following except

The Financial Accounting Standards Board (FASB) was proposed by the

The Financial Accounting Foundation

An organization that has not published accounting standards is the

The expectations gap is caused by what the public thinks accountants should be doing and what accountants think they can do.

The passage of a new FASB Standards Statement requires the support of five of the seven board members.

Which of the following publications does not qualify as a statement of generally accepted accounting principles?

Conceptual Framework Underlying Financial Accounting

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Filters

Exam 1: Financial Accounting and Accounting Standards

An effective capital allocation process

The information provided by financial reporting pertains to

The Securities and Exchange Commission appointed the Committee on Accounting Procedure.

Generally accepted accounting principles

The most authoritative category of generally accepted accounting principles includes all of the following except

The role of the Securities and Exchange Commission in the formulation of accounting principles can be best described as

A common set of accounting standards and procedures are called

Accounting standards are a product of careful logic or empirical findings and are not influenced by political action.

Which of the following statements is not an objective of financial reporting?

General-purpose financial statements are the product of

The most significant current source of generally accepted accounting principles is the

Users of the financial information provided by a company use that information to make capital allocation decisions.

Financial accounting standard-setting in the United States

Users of financial reports include all of the following except

The Financial Accounting Standards Board (FASB) was proposed by the

The Financial Accounting Foundation

An organization that has not published accounting standards is the

The expectations gap is caused by what the public thinks accountants should be doing and what accountants think they can do.

The passage of a new FASB Standards Statement requires the support of five of the seven board members.

Which of the following publications does not qualify as a statement of generally accepted accounting principles?

Conceptual Framework Underlying Financial Accounting

The Accounting Information System

Income Statement and Related Information

Balance Sheet and Statement of Cash Flows

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities and Contingencies

Filters