Question 1

The AICPA Code of Professional Conduct includes which of the following principles?

Accepted Answer

A)  Professionalism 
B)  Conservatism 
C)  Objectivity 
D)  Quality 
A)  Professionalism 
B)  Conservatism 
C)  Objectivity 
D)  Quality

Question 2

Creditors' information needs revolve around all of the following decisions, except

Accepted Answer

A)  extending credit 
B)  maintaining a credit relationship 
C)  not extending credit 
D)  investing in credit instruments 
A)  extending credit 
B)  maintaining a credit relationship 
C)  not extending credit 
D)  investing in credit instruments

Question 3

Match between columns
                        Premises:  A member should be free from conflicts of interest and be objective. A member should be free of bias and provide auditing and attestation services in an independent manner.
 A member is public practice should always consider the Code of Professional Conduct in determining the nature and scope of services which they have been asked to provide.
 Members should perform all of their professional activities with the highest sense of integrity possible. This maintains and broadens public confidence in the profession.
 Members should act in a way that demonstrates professionalism and honors public trust.
 As a member, one should continually strive to improve competence  and the quality of services to the best of their ability.
 Members should exercise sensitive professional and moral judgments in when carrying out their activities as a professional.

Accepted Answer

The Answer of Responsibilities and Scope and Nature of Services is...

Question 4

Beginning in 1938 and extending to the present, which is the correct sequence of accounting rule-making bodies?

Accepted Answer

A)  APB-CAP-FASB 
B)  CAP-FASB-APB 
C)  CAP-APB-FASB 
D)  FASB-APB-CAP 
A)  APB-CAP-FASB 
B)  CAP-FASB-APB 
C)  CAP-APB-FASB 
D)  FASB-APB-CAP

Question 5

Which of the following is an internal user of a company's financial information?

Accepted Answer

A)  company treasurer 
B)  shareholder in the company 
C)  bank lending to the company 
D)  union 
A)  company treasurer 
B)  shareholder in the company 
C)  bank lending to the company 
D)  union

Question 6

Which of the following statements is true?

Accepted Answer

A)  In order to remain impartial, the FASB discourages public input during development of standards. 
B)  FASB accounting standards are the result of clearly defined objectives, an integrated body of theory, and the known consequences of actions. 
C)  The FASB deliberates and issues accounting standards only after receiving a formal letter of request from the SEC. 
D)  Accounting standards, which have economic and political consequences, are often the result of compromise. 
A)  In order to remain impartial, the FASB discourages public input during development of standards. 
B)  FASB accounting standards are the result of clearly defined objectives, an integrated body of theory, and the known consequences of actions. 
C)  The FASB deliberates and issues accounting standards only after receiving a formal letter of request from the SEC. 
D)  Accounting standards, which have economic and political consequences, are often the result of compromise.

Question 7

Which of the following transactions would be reported in the cash flows from investing activities section in the statement of cash flows for the Harlem Company?

Accepted Answer

A)  Harlem sold a piece of land for $600,000. 
B)  Harlem borrowed $3,000,000 
C)  Harlem issued common stock for $700,000 to investors. 
D)  Harlem paid a cash dividend to its shareholders. 
A)  Harlem sold a piece of land for $600,000. 
B)  Harlem borrowed $3,000,000 
C)  Harlem issued common stock for $700,000 to investors. 
D)  Harlem paid a cash dividend to its shareholders.

Question 8

The four major financial statements of a corporation consist of the

Accepted Answer

A)  income statement, balance sheet, statement of cash flows, and statement of changes in shareholders' equity. 
B)  balance sheet, statement of cash flows, statement of retained earnings, and income statement. 
C)  income statement, statement of cash flows, statement of financial flexibility, and balance sheet. 
D)  statement of cash flows, balance sheet, income statement, and statement of capital equity. 
A)  income statement, balance sheet, statement of cash flows, and statement of changes in shareholders' equity. 
B)  balance sheet, statement of cash flows, statement of retained earnings, and income statement. 
C)  income statement, statement of cash flows, statement of financial flexibility, and balance sheet. 
D)  statement of cash flows, balance sheet, income statement, and statement of capital equity.

Question 9

Unethical actions include which of the following?

Accepted Answer

A)  polluting lakes and streams 
B)  overcharging on government contracts 
C)  securities fraud 
D)  All of these choices are unethical actions. 
A)  polluting lakes and streams 
B)  overcharging on government contracts 
C)  securities fraud 
D)  All of these choices are unethical actions.

Question 10

After formulating a strategic plan, a company will engage in what three types of activities?

Accepted Answer

A)  Planning, operating, and selling 
B)  Investing, operating, and selling 
C)  Financing, investing, and operating 
D)  Operating, planning, and financing 
A)  Planning, operating, and selling 
B)  Investing, operating, and selling 
C)  Financing, investing, and operating 
D)  Operating, planning, and financing

Question 11

The SEC is considering proposals regarding the accounting principles companies may use for their financial statement filings. The SEC could require that U.S. companies use only U.S. GAAP in their financial statement filings. Alternatively, the SEC could allow, or even require, U.S. companies to use IFRS in their financial statement filings. Many issues and complexities surround the use of IFRS. The SEC must consider these and many other issues as it deliberates whether it should continue to require the use of U.S. GAAP or whether it should require the use of IFRS.
Required:
Identify and discuss three of the potential problems to be considered by the SEC in deliberating these proposals.

Accepted Answer

Note: Six issues are discussed below. Th

Question 12

What important topics are discussed in the Management Discussion and Analysis section of the financial statements?

Accepted Answer

A)  Business risk factors associated with the company. 
B)  Management provides insight into key decisions implemented during that time period and future developments. 
C)  Management utilizes this area as a forum to discuss strategic motives. 
D)  All of these choices are discussed. 
A)  Business risk factors associated with the company. 
B)  Management provides insight into key decisions implemented during that time period and future developments. 
C)  Management utilizes this area as a forum to discuss strategic motives. 
D)  All of these choices are discussed.

Question 13

The demand for accounting information arises from the informational needs of various stakeholders.
Required
List five internal stakeholders or external stakeholders.

Accepted Answer

Internal
Employees Company Exe

Question 14

The demand for relevant and reliable financial information stems from the needs of the internal and external stakeholders.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not a major standard-setting body responsible for the establishment of U.S. and international GAAP Generally Accepted Accounting Principles)?

Accepted Answer

A)  SEC Securities Exchange Commission) 
B)  PCAOB Public Company Accounting Oversight Board) 
C)  FASB Financial Accounting Standards Board) 
D)  IASB International Accounting Standards Board) 
A)  SEC Securities Exchange Commission) 
B)  PCAOB Public Company Accounting Oversight Board) 
C)  FASB Financial Accounting Standards Board) 
D)  IASB International Accounting Standards Board)

Question 16

While formally the SEC is charged with the responsibility for establishing accounting principles to be followed in the preparation of SEC filings, the impact of the SEC generally has been

Accepted Answer

A)  in its assistance to Congress with the development of tax law. 
B)  in guiding the development of stock exchanges. 
C)  ineffective in controlling foreign corporations and investors. 
D)  in its informal review and approval of standards developed in the private sector prior to their release. 
A)  in its assistance to Congress with the development of tax law. 
B)  in guiding the development of stock exchanges. 
C)  ineffective in controlling foreign corporations and investors. 
D)  in its informal review and approval of standards developed in the private sector prior to their release.

Question 17

Which of the following documents includes all of the accounting standards?

Accepted Answer

A)  Regulation S-X 
B)  The FASB Conceptual Framework 
C)  Statements of Financial Accounting Standards 
D)  none of these 
A)  Regulation S-X 
B)  The FASB Conceptual Framework 
C)  Statements of Financial Accounting Standards 
D)  none of these

Question 18

Which of the following is not a major standard-setting body responsible for the establishment of U.S. and International Financial Reporting Standards?

Accepted Answer

A)  SEC Securities Exchange Commission) 
B)  PCAOB Public Company Accounting Oversight Board) 
C)  FASB Financial Accounting Standards Board) 
D)  IASB International Accounting Standards Board) 
A)  SEC Securities Exchange Commission) 
B)  PCAOB Public Company Accounting Oversight Board) 
C)  FASB Financial Accounting Standards Board) 
D)  IASB International Accounting Standards Board)

Question 19

The convergence project between the IASB and GAAP was initiated in 2002 when the two boards entered into the "Northward Agreement".

Accepted Answer

A) True 
 B)False

Question 20

Prior to 2009, the FASB issued several types of pronouncements which had differing levels of authority. Explain the differing types of pronouncements, provide a brief explanation as to what changed after 2009 and why is it still important today?

Accepted Answer

FASB Pronouncements were issued with dif

Exam 1: The Demand for and Supply of Financial Accounting Information

The AICPA Code of Professional Conduct includes which of the following principles?

Creditors' information needs revolve around all of the following decisions, except

Beginning in 1938 and extending to the present, which is the correct sequence of accounting rule-making bodies?

Which of the following is an internal user of a company's financial information?

Which of the following statements is true?

Which of the following transactions would be reported in the cash flows from investing activities section in the statement of cash flows for the Harlem Company?

The four major financial statements of a corporation consist of the

Unethical actions include which of the following?

After formulating a strategic plan, a company will engage in what three types of activities?

What important topics are discussed in the Management Discussion and Analysis section of the financial statements?

The demand for accounting information arises from the informational needs of various stakeholders. Required List five internal stakeholders or external stakeholders.

The demand for relevant and reliable financial information stems from the needs of the internal and external stakeholders.

Which of the following is not a major standard-setting body responsible for the establishment of U.S. and international GAAP Generally Accepted Accounting Principles)?

While formally the SEC is charged with the responsibility for establishing accounting principles to be followed in the preparation of SEC filings, the impact of the SEC generally has been

Which of the following documents includes all of the accounting standards?

Which of the following is not a major standard-setting body responsible for the establishment of U.S. and International Financial Reporting Standards?

The convergence project between the IASB and GAAP was initiated in 2002 when the two boards entered into the "Northward Agreement".

Prior to 2009, the FASB issued several types of pronouncements which had differing levels of authority. Explain the differing types of pronouncements, provide a brief explanation as to what changed after 2009 and why is it still important today?

Financial Reporting: Its Conceptual Framework

Review of a Company S Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows Time Value of Money Module

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingent Obligations

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Long-Term Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Post-Retirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Understanding Time Value of Money Formulas and Concepts

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