Question 1

The journal Accounting Horizons is published by which of the following organizations?

Accepted Answer

A) American Institute of Certified Public Accountants (AICP
A)  
B) American Accounting Association (AA
A)  
C) Securities and Exchange Commission (SE
C)  
D) Financial Accounting Standards Board (FAS
B)  
A) American Institute of Certified Public Accountants (AICP
A)  
B) American Accounting Association (AA
A)  
C) Securities and Exchange Commission (SE
C)  
D) Financial Accounting Standards Board (FAS
B)

Question 2

The following are users of accounting information:

Accepted Answer

A) stakeholders 
B) creditors 
C) investors 
D) all of the above 
A) stakeholders 
B) creditors 
C) investors 
D) all of the above

Question 3

The Governmental Accounting Standards Board

Accepted Answer

A) was incorporated into the Financial Accounting Standards Board when the FASB was created. 
B) addresses financial reporting issues of U.S. government treaties and treasury rulings. 
C) addresses the financial reporting issues related to state and local governments. 
D) addresses the governmental reporting activities of the SEC. 
A) was incorporated into the Financial Accounting Standards Board when the FASB was created. 
B) addresses financial reporting issues of U.S. government treaties and treasury rulings. 
C) addresses the financial reporting issues related to state and local governments. 
D) addresses the governmental reporting activities of the SEC.

Question 4

Which of the following statements concerning the objectives of financial reporting is correct?

Accepted Answer

A) The objectives are intended to be specific in nature. 
B) The objectives are directed primarily toward the needs of internal users of accounting information. 
C) The objectives were the end result of the FASB's conceptual framework project. 
D) The objectives encompass not only financial statement disclosures, but other information as well. 
A) The objectives are intended to be specific in nature. 
B) The objectives are directed primarily toward the needs of internal users of accounting information. 
C) The objectives were the end result of the FASB's conceptual framework project. 
D) The objectives encompass not only financial statement disclosures, but other information as well.

Question 5

Internal users are provided information by the following branch of accounting:

Accepted Answer

A) auditing. 
B) managerial accounting. 
C) financial accounting. 
D) income tax accounting. 
A) auditing. 
B) managerial accounting. 
C) financial accounting. 
D) income tax accounting.

Question 6

Which of the following qualitative characteristics of financial information requires that information NOT be biased in favor of one group of users to the detriment of others?

Accepted Answer

A) Relevance 
B) Reliability 
C) Verifiability 
D) Neutrality 
A) Relevance 
B) Reliability 
C) Verifiability 
D) Neutrality

Question 7

Interested parties receive information about a company's past performance from:

Accepted Answer

A) CEO's 
B) the SEC 
C) financial reporting 
D) financial news 
A) CEO's 
B) the SEC 
C) financial reporting 
D) financial news

Question 8

Accounting standards help accountants meet the information demands of interested parties by providing:

Accepted Answer

A) legislation introduction pertaining to financial reporting 
B) limits and guidance for financial reporting 
C) improved operating plans to the Board 
D) reports to the Media 
A) legislation introduction pertaining to financial reporting 
B) limits and guidance for financial reporting 
C) improved operating plans to the Board 
D) reports to the Media

Question 9

Conservatism is best described as selecting an accounting alternative that

Accepted Answer

A) understates assets and/or net income. 
B) has the least favorable impact on owners' equity. 
C) overstates, as opposed to understates, liabilities. 
D) is least likely to mislead users of financial information. 
A) understates assets and/or net income. 
B) has the least favorable impact on owners' equity. 
C) overstates, as opposed to understates, liabilities. 
D) is least likely to mislead users of financial information.

Question 10

Form 10-K is submitted to the

Accepted Answer

A) FASB. 
B) GASB. 
C) IRS. 
D) SEC. 
A) FASB. 
B) GASB. 
C) IRS. 
D) SEC.

Question 11

In providing information with the qualitative characteristics that render the information useful,the constraint of materiality may affect what is included and excluded from the financial information reported.
Explain the concept of materiality.

Accepted Answer

An item is material if its inclusion or

Question 12

The following is a qualitative characteristic of accounting information:

Accepted Answer

A) timeliness 
B) feedback value 
C) neutrality 
D) decision usefulness. 
A) timeliness 
B) feedback value 
C) neutrality 
D) decision usefulness.

Question 13

Operations of the FASB are overseen by the:

Accepted Answer

A) operations of the AICPA. 
B) Financial Accounting Foundation 
C) AAA. 
D) financial reporting arm of the SEC. 
A) operations of the AICPA. 
B) Financial Accounting Foundation 
C) AAA. 
D) financial reporting arm of the SEC.

Question 14

For which of the following reporting issues has the FASB adopted substantially the same approach as the IASB?

Accepted Answer

A) Segment reporting 
B) Earnings per share 
C) Statement of cash flows 
D) Pension plans 
A) Segment reporting 
B) Earnings per share 
C) Statement of cash flows 
D) Pension plans

Question 15

The responsibility of the Emerging Issues Task Force (EITF)is to

Accepted Answer

A) issue statements which reflect a consensus of the EITF on how to account for new financial reporting issues where guidance is needed quickly. 
B) do research on financial reporting issues that are being addressed by the AICPA. 
C) respond to groups lobbying the FASB on issues that affect a particular industry. 
D) develop concept statements the AICPA can use as a frame of reference to solve future problems. 
A) issue statements which reflect a consensus of the EITF on how to account for new financial reporting issues where guidance is needed quickly. 
B) do research on financial reporting issues that are being addressed by the AICPA. 
C) respond to groups lobbying the FASB on issues that affect a particular industry. 
D) develop concept statements the AICPA can use as a frame of reference to solve future problems.

Question 16

The secondary qualitative characteristics of accounting information are

Accepted Answer

A) relevance and reliability. 
B) comparability and consistency. 
C) understandability and decision usefulness. 
D) materiality and conservatism. 
A) relevance and reliability. 
B) comparability and consistency. 
C) understandability and decision usefulness. 
D) materiality and conservatism.

Question 17

Documents issued by the FASB include all of the following except

Accepted Answer

A) Statements of Financial Accounting Standards. 
B) Interpretations of Statements of Financial Accounting Standards. 
C) Statements of Financial Accounting Concepts. 
D) Financial Reporting Releases. 
A) Statements of Financial Accounting Standards. 
B) Interpretations of Statements of Financial Accounting Standards. 
C) Statements of Financial Accounting Concepts. 
D) Financial Reporting Releases.

Question 18

Which of the following is NOT an implication of the going-concern assumption?

Accepted Answer

A) The historical cost principle is credible. 
B) Depreciation and amortization policies are justifiable and appropriate. 
C) The current/noncurrent classification of assets and liabilities is justifiable and significant. 
D) Amortizing research and development costs over multiple periods is justifiable and appropriate. 
A) The historical cost principle is credible. 
B) Depreciation and amortization policies are justifiable and appropriate. 
C) The current/noncurrent classification of assets and liabilities is justifiable and significant. 
D) Amortizing research and development costs over multiple periods is justifiable and appropriate.

Question 19

Accounting for inventories by applying the lower-of-cost-or-market is an example of the application of

Accepted Answer

A) conservatism. 
B) comparability. 
C) consistency. 
D) materiality. 
A) conservatism. 
B) comparability. 
C) consistency. 
D) materiality.

Question 20

The following private-sector organization was created by the Sarbanes-Oxley Act of 2002 to perform required audits on U.S.publicly traded companies:

Accepted Answer

A) AICPA 
B) Public Company Accounting Oversight Board 
C) Financial Executives Institute. 
D) Financial Accounting Standards Board. 
A) AICPA 
B) Public Company Accounting Oversight Board 
C) Financial Executives Institute. 
D) Financial Accounting Standards Board.

Exam 1: Financial Reporting

The journal Accounting Horizons is published by which of the following organizations?

The following are users of accounting information:

The Governmental Accounting Standards Board

Which of the following statements concerning the objectives of financial reporting is correct?

Internal users are provided information by the following branch of accounting:

Which of the following qualitative characteristics of financial information requires that information NOT be biased in favor of one group of users to the detriment of others?

Interested parties receive information about a company's past performance from:

Accounting standards help accountants meet the information demands of interested parties by providing:

Conservatism is best described as selecting an accounting alternative that

Form 10-K is submitted to the

In providing information with the qualitative characteristics that render the information useful,the constraint of materiality may affect what is included and excluded from the financial information reported. Explain the concept of materiality.

The following is a qualitative characteristic of accounting information:

Operations of the FASB are overseen by the:

For which of the following reporting issues has the FASB adopted substantially the same approach as the IASB?

The responsibility of the Emerging Issues Task Force (EITF)is to

The secondary qualitative characteristics of accounting information are

Documents issued by the FASB include all of the following except

Which of the following is NOT an implication of the going-concern assumption?

Accounting for inventories by applying the lower-of-cost-or-market is an example of the application of

The following private-sector organization was created by the Sarbanes-Oxley Act of 2002 to perform required audits on U.S.publicly traded companies:

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Employee Compensation-Payroll,pensions, Other Compissues

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters