Question 1

How does accounting help the capital allocation process attract investment capital?

Accepted Answer

A)  Provides timely, relevant information. 
B)  Encourages innovation. 
C)  Promotes productivity. 
D)  Provides timely, relevant information and encourages innovation. 
A)  Provides timely, relevant information. 
B)  Encourages innovation. 
C)  Promotes productivity. 
D)  Provides timely, relevant information and encourages innovation.

Question 2

The international financial reporting environment includes challenges in financial reporting including all of the following except:

Accepted Answer

A)  Political environment. 
B)  Expectations gap. 
C)  Decision-usefulness. 
D)  Ethics. 
A)  Political environment. 
B)  Expectations gap. 
C)  Decision-usefulness. 
D)  Ethics.

Question 3

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 4

The purpose of the International Accounting Standards Board is to

Accepted Answer

A)  issue enforceable standards which regulate the financial accounting and reporting of multinational corporations. 
B)  develop a uniform currency in which the financial transactions of companies through-out the world would be measured. 
C)  develop a single set of high-quality IFRS. 
D)  arbitrate accounting disputes between auditors and international companies. 
A)  issue enforceable standards which regulate the financial accounting and reporting of multinational corporations. 
B)  develop a uniform currency in which the financial transactions of companies through-out the world would be measured. 
C)  develop a single set of high-quality IFRS. 
D)  arbitrate accounting disputes between auditors and international companies.

Question 5

As part of the objective of general-purpose financial reporting, there is an emphasis on "assessing cash flow prospects." Under International Financial Reporting Standards (IFRS) this is interpreted to mean:

Accepted Answer

A)  Cash basis accounting is preferred over accrual based accounting. 
B)  Information about the financial effects of cash receipts and cash payments is generally considered the best indicator of a company's present and continuing ability to generate favorable cash flows. 
C)  Over the long run, trends in revenues and expenses are generally more meaningful than trends in cash receipts and disbursements. 
D)  All of the choices are correct regarding "assessing cash flow prospects" under IFRS. 
A)  Cash basis accounting is preferred over accrual based accounting. 
B)  Information about the financial effects of cash receipts and cash payments is generally considered the best indicator of a company's present and continuing ability to generate favorable cash flows. 
C)  Over the long run, trends in revenues and expenses are generally more meaningful than trends in cash receipts and disbursements. 
D)  All of the choices are correct regarding "assessing cash flow prospects" under IFRS.

Question 6

International Accounting Standards are no longer considered applicable because they have been replaced by International Financial Reporting Standards.

Accepted Answer

A) True 
 B)False

Question 7

An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit.

Accepted Answer

A) True 
 B)False

Question 8

Financial statements are the principal means through which financial information is communicated to those outside an enterprise.

Accepted Answer

A) True 
 B)False

Question 9

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 10

The IASB relies primarily on the International Organization of Securities Commissions (IOSCO) for regulation and enforcement of its standards.

Accepted Answer

A) True 
 B)False

Question 11

One element of the objective of financial reporting is to provide

Accepted Answer

A)  information about the investors in the business entity. 
B)  information about the liquidation values of the resources held by the enterprise. 
C)  information that is useful in assessing cash flow prospects. 
D)  information that will attract new investors. 
A)  information about the investors in the business entity. 
B)  information about the liquidation values of the resources held by the enterprise. 
C)  information that is useful in assessing cash flow prospects. 
D)  information that will attract new investors.

Question 12

Interpretations issued by the IFRS Interpretations Committee are more authoritative than IASB Standards and Interpretations.

Accepted Answer

A) True 
 B)False

Question 13

What is "expectation gap"?

Accepted Answer

A)  The difference between what the public thinks the accountant is not doing and what the accountant knows they don't do. 
B)  The difference between what the public thinks the accountant should do and what Congress says the accountant should do. 
C)  The difference between what the public thinks the accountant should do and what the accountant thinks they can do. 
D)  The difference between what the accountant should do and what the Courts say the accountant should be doing. 
A)  The difference between what the public thinks the accountant is not doing and what the accountant knows they don't do. 
B)  The difference between what the public thinks the accountant should do and what Congress says the accountant should do. 
C)  The difference between what the public thinks the accountant should do and what the accountant thinks they can do. 
D)  The difference between what the accountant should do and what the Courts say the accountant should be doing.

Question 14

Financial statements in the early 2000s provided information related to

Accepted Answer

A)  nonfinancial measurements. 
B)  forward-looking data. 
C)  hard assets (inventory and plant assets). 
D)  None of these answers are correct. 
A)  nonfinancial measurements. 
B)  forward-looking data. 
C)  hard assets (inventory and plant assets). 
D)  None of these answers are correct.

Question 15

What is the major objective of financial reporting?

Accepted Answer

A)  Provide information that is useful to management in making decisions. 
B)  Provide information that clearly portray nonfinancial transactions. 
C)  Provide information that is useful to present and potential equity investors, lenders, and other creditors in making decisions.. 
D)  Provide information that excludes claims to the resources. 
A)  Provide information that is useful to management in making decisions. 
B)  Provide information that clearly portray nonfinancial transactions. 
C)  Provide information that is useful to present and potential equity investors, lenders, and other creditors in making decisions.. 
D)  Provide information that excludes claims to the resources.

Question 16

A unanimous vote by all Board members is needed to issue a new International Financial Reporting Standard (IFRS).

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The International Accounting Standards Board (IASB) follows specific steps in developing International Financial Reporting Standards (IFRS). Place the following steps in the correct order:
1) Research and analysis conducted; preliminary views of pros and cons issued.
2) Topics identified and placed on the agenda.
3) Board evaluates responses, final standard issued.
4) Public hearing on proposed standard
5) Board evaluates research, issues exposure draft.

Accepted Answer

A)  1, 2, 3, 4, 5 
B)  2, 1, 4, 5, 3 
C)  1, 2, 5, 4, 3 
D)  1, 2, 5, 3, 4 
A)  1, 2, 3, 4, 5 
B)  2, 1, 4, 5, 3 
C)  1, 2, 5, 4, 3 
D)  1, 2, 5, 3, 4

Question 19

The two major standard-setting organizations in the world are

Accepted Answer

A)  Financial Accounting Standards Board (FAS
B)  and the International Organization of Securities Commission (IOSCO). 
B)  Financial Accounting Standards Board (FAS
B)  and the International Accounting Standards Board (IAS
B) . 
C)  The International Accounting Standards Board (IAS
B)  and International Organization of Securities Commission (IOSCO). 
D)  The International Accounting Standards Board (IAS
B)  and the Standards Advisory Council (SA
C) . 
A)  Financial Accounting Standards Board (FAS
B)  and the International Organization of Securities Commission (IOSCO). 
B)  Financial Accounting Standards Board (FAS
B)  and the International Accounting Standards Board (IAS
B) . 
C)  The International Accounting Standards Board (IAS
B)  and International Organization of Securities Commission (IOSCO). 
D)  The International Accounting Standards Board (IAS
B)  and the Standards Advisory Council (SA
C) .

Question 20

International Financial Reporting Standards preceded International Accounting Standards.

Accepted Answer

A) True 
 B)False

How does accounting help the capital allocation process attract investment capital?

The international financial reporting environment includes challenges in financial reporting including all of the following except:

General-purpose financial statements are the product of

The purpose of the International Accounting Standards Board is to

As part of the objective of general-purpose financial reporting, there is an emphasis on "assessing cash flow prospects." Under International Financial Reporting Standards (IFRS) this is interpreted to mean:

International Accounting Standards are no longer considered applicable because they have been replaced by International Financial Reporting Standards.

An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit.

Financial statements are the principal means through which financial information is communicated to those outside an enterprise.

Users of financial reports include all of the following except:

The IASB relies primarily on the International Organization of Securities Commissions (IOSCO) for regulation and enforcement of its standards.

One element of the objective of financial reporting is to provide

Interpretations issued by the IFRS Interpretations Committee are more authoritative than IASB Standards and Interpretations.

What is "expectation gap"?

Financial statements in the early 2000s provided information related to

What is the major objective of financial reporting?

A unanimous vote by all Board members is needed to issue a new International Financial Reporting Standard (IFRS).

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

The two major standard-setting organizations in the world are

International Financial Reporting Standards preceded International Accounting Standards.

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Statement of Financial Position 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

Filters

Exam 1: Financial Reporting and Accounting Standards

How does accounting help the capital allocation process attract investment capital?

The international financial reporting environment includes challenges in financial reporting including all of the following except:

General-purpose financial statements are the product of

The purpose of the International Accounting Standards Board is to

As part of the objective of general-purpose financial reporting, there is an emphasis on "assessing cash flow prospects." Under International Financial Reporting Standards (IFRS) this is interpreted to mean:

International Accounting Standards are no longer considered applicable because they have been replaced by International Financial Reporting Standards.

An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit.

Financial statements are the principal means through which financial information is communicated to those outside an enterprise.

Users of financial reports include all of the following except:

The IASB relies primarily on the International Organization of Securities Commissions (IOSCO) for regulation and enforcement of its standards.

One element of the objective of financial reporting is to provide

Interpretations issued by the IFRS Interpretations Committee are more authoritative than IASB Standards and Interpretations.

What is "expectation gap"?

Financial statements in the early 2000s provided information related to

What is the major objective of financial reporting?

A unanimous vote by all Board members is needed to issue a new International Financial Reporting Standard (IFRS).

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

The two major standard-setting organizations in the world are

International Financial Reporting Standards preceded International Accounting Standards.

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Statement of Financial Position 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

Filters