Question 1

The American Institute of Certified Public Accountants (AICPA) continues to be involved in all of the following except

Accepted Answer

A)  developing and enforcing professional ethics. 
B)  developing auditing standards for public companies. 
C)  providing professional education programs. 
D)  All of the answer choices are correct. 
A)  developing and enforcing professional ethics. 
B)  developing auditing standards for public companies. 
C)  providing professional education programs. 
D)  All of the answer choices are correct.

Question 2

Which of the following will be of interest to investors in decision-making?

Accepted Answer

A)  Assessing the company's ability to generate net cash inflows. 
B)  Assessing management's ability to protect and enhance the capital providers' investments. 
C)  Both assessing the company's ability to generate net cash inflows and assessing management's ability to protect and enhance the capital provider's investments. 
D)  Assessing the company's ability to collect debts. 
A)  Assessing the company's ability to generate net cash inflows. 
B)  Assessing management's ability to protect and enhance the capital providers' investments. 
C)  Both assessing the company's ability to generate net cash inflows and assessing management's ability to protect and enhance the capital provider's investments. 
D)  Assessing the company's ability to collect debts.

Question 3

Which of the following is a general limitation of "general purpose financial statements"?

Accepted Answer

A)  General purpose financial statements may not be the most informative for a specific enterprise. 
B)  General purpose financial statements are not comparable. 
C)  General purpose financial statements do not fairly present a company's financial operations. 
D)  None of the answer choices are correct. 
A)  General purpose financial statements may not be the most informative for a specific enterprise. 
B)  General purpose financial statements are not comparable. 
C)  General purpose financial statements do not fairly present a company's financial operations. 
D)  None of the answer choices are correct.

Question 4

The IASB's standard-setting structure includes all of the following except

Accepted Answer

A)  the Standing Interpretations Committee 
B)  the Standards Advisory Council 
C)  the Standards Comparison Committee 
D)  the Trustees 
A)  the Standing Interpretations Committee 
B)  the Standards Advisory Council 
C)  the Standards Comparison Committee 
D)  the Trustees

Question 5

Members of the Financial Accounting Standards Board are

Accepted Answer

A)  employed by the American Institute of Certified Public Accountants (AICP
A) . 
B)  part-time employees. 
C)  required to hold a CPA certificate. 
D)  independent of any other organization. 
A)  employed by the American Institute of Certified Public Accountants (AICP
A) . 
B)  part-time employees. 
C)  required to hold a CPA certificate. 
D)  independent of any other organization.

Question 6

Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control a company's operations.

Accepted Answer

A) True 
 B)False

Question 7

The internal control standards applicable to Sarbanes-Oxley (SOX) apply only to large public companies listed on U.S. exchanges. questions:

Accepted Answer

A) True 
 B)False

Question 8

The AICPA's Code of Professional Conduct requires that members prepare financial statements in accordance with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 9

What is not a reason that accounting standards may differ across countries?

Accepted Answer

A)  Governments. 
B)  Language. 
C)  Culture. 
D)  Past practice. 
A)  Governments. 
B)  Language. 
C)  Culture. 
D)  Past practice.

Question 10

The financial statements most frequently provided include all of the following except the

Accepted Answer

A)  balance sheet. 
B)  income statement. 
C)  statement of cash flows. 
D)  statement of retained earnings. 
A)  balance sheet. 
B)  income statement. 
C)  statement of cash flows. 
D)  statement of retained earnings.

Question 11

Which of the following is not considered a component of generally accepted accounting principles?

Accepted Answer

A)  FASB Implementation Guides. 
B)  Widely recognized industry practices. 
C)  Articles published in CPA journals. 
D)  AICPA Accounting Interpretations. 
A)  FASB Implementation Guides. 
B)  Widely recognized industry practices. 
C)  Articles published in CPA journals. 
D)  AICPA Accounting Interpretations.

Question 12

U.S. companies that list overseas are required to use International Financial Reporting Standards, issued by the International Accounting Standards Board.

Accepted Answer

A) True 
 B)False

Question 13

What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United States?

Accepted Answer

A)  The SEC requires all companies listed on an exchange to submit their financial statements to the SEC. 
B)  The SEC coordinates with the AICPA in establishing accounting standards. 
C)  The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction. 
D)  The SEC reviews financial statements for compliance. 
A)  The SEC requires all companies listed on an exchange to submit their financial statements to the SEC. 
B)  The SEC coordinates with the AICPA in establishing accounting standards. 
C)  The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction. 
D)  The SEC reviews financial statements for compliance.

Question 14

Investors are interested in financial reporting because it provides information that is useful for making decisions.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following organizations is not among the four international standard-setting organizations?

Accepted Answer

A)  The International Accounting Standards Committee Foundation (IASCF) 
B)  The Standards Advisory Council (SA
C)  
C)  The International Financial Reporting Interpretations Committee (IFRI
C)  
D)  The Financial Executives Institute (FEI) 
A)  The International Accounting Standards Committee Foundation (IASCF) 
B)  The Standards Advisory Council (SA
C)  
C)  The International Financial Reporting Interpretations Committee (IFRI
C)  
D)  The Financial Executives Institute (FEI)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Ethical issues in financial accounting are governed by the AICPA.

Accepted Answer

A) True 
 B)False

Question 18

Primary users for general-purpose financial statements include

Accepted Answer

A)  creditors. 
B)  employees. 
C)  investors. 
D)  both creditors and investors. 
A)  creditors. 
B)  employees. 
C)  investors. 
D)  both creditors and investors.

Question 19

The expectations gap is due to the difference between what the public thinks accountants should do and what accountants think they can do.

Accepted Answer

A) True 
 B)False

Question 20

Accounting standards are now less likely to require the recording or disclosure of fair value information.

Accepted Answer

A) True 
 B)False

Exam 1: Financial Accounting and Accounting Standards

The American Institute of Certified Public Accountants (AICPA) continues to be involved in all of the following except

Which of the following will be of interest to investors in decision-making?

Which of the following is a general limitation of "general purpose financial statements"?

The IASB's standard-setting structure includes all of the following except

Members of the Financial Accounting Standards Board are

Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control a company's operations.

The internal control standards applicable to Sarbanes-Oxley (SOX) apply only to large public companies listed on U.S. exchanges. questions:

The AICPA's Code of Professional Conduct requires that members prepare financial statements in accordance with generally accepted accounting principles.

What is not a reason that accounting standards may differ across countries?

The financial statements most frequently provided include all of the following except the

Which of the following is not considered a component of generally accepted accounting principles?

U.S. companies that list overseas are required to use International Financial Reporting Standards, issued by the International Accounting Standards Board.

What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United States?

Investors are interested in financial reporting because it provides information that is useful for making decisions.

Which of the following organizations is not among the four international standard-setting organizations?

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

Ethical issues in financial accounting are governed by the AICPA.

Primary users for general-purpose financial statements include

The expectations gap is due to the difference between what the public thinks accountants should do and what accountants think they can do.

Accounting standards are now less likely to require the recording or disclosure of fair value information.

Conceptual Framework for Financial Reporting

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

Long-Term Liabilities

Stockholders Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Full Disclosure in Financial Reporting

Appendix

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