Question 1

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 2

According to the FASB's conceptual framework,the process of reporting an item in the financial statements of an entity is

Accepted Answer

A)  realization. 
B)  recognition. 
C)  matching. 
D)  allocation. 
A)  realization. 
B)  recognition. 
C)  matching. 
D)  allocation.

Question 3

The normal order followed by the FASB in publishing its standards is

Accepted Answer

A)  statement,discussion memorandum,opinion. 
B)  discussion memorandum,interpretation,exposure draft,statement. 
C)  exposure draft,discussion memorandum,statement. 
D)  discussion memorandum,exposure draft,statement. 
A)  statement,discussion memorandum,opinion. 
B)  discussion memorandum,interpretation,exposure draft,statement. 
C)  exposure draft,discussion memorandum,statement. 
D)  discussion memorandum,exposure draft,statement.

Question 4

The financial statements that are prepared for the business are separate and distinct from the owners according to the

Accepted Answer

A)  going-concern assumption. 
B)  matching principle. 
C)  economic entity assumption. 
D)  full disclosure principle. 
A)  going-concern assumption. 
B)  matching principle. 
C)  economic entity assumption. 
D)  full disclosure principle.

Question 5

According to the FASB's conceptual framework,which of the following relates to both relevance and reliability? Consistency Verifiability

Accepted Answer

A)  Yes Yes 
B)  Yes No 
C)  No Yes 
D)  No No 
A)  Yes Yes 
B)  Yes No 
C)  No Yes 
D)  No No

Question 6

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 7

The International Accounting Standards Board was formed to

Accepted Answer

A)  enforce FASB standards in foreign countries. 
B)  develop worldwide accepted accounting standards. 
C)  establish accounting standards for U.S.multinational companies. 
D)  develop accounting standards for countries that do not have their own standard-setting bodies. 
A)  enforce FASB standards in foreign countries. 
B)  develop worldwide accepted accounting standards. 
C)  establish accounting standards for U.S.multinational companies. 
D)  develop accounting standards for countries that do not have their own standard-setting bodies.

Question 8

The assumed continuation of a business entity in the absence of evidence to the contrary is an example of the accounting concept of

Accepted Answer

A)  accrual. 
B)  consistency. 
C)  comparability. 
D)  going concern. 
A)  accrual. 
B)  consistency. 
C)  comparability. 
D)  going concern.

Question 9

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 10

Large business enterprises employ financial accountants who are primarily concerned with__________ financial reporting.

Accepted Answer

A)  corporate tax 
B)  management 
C)  external 
D)  international 
A)  corporate tax 
B)  management 
C)  external 
D)  international

Question 11

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 12

In 1973,the following private-sector body was organized to set accounting standards in the United States:

Accepted Answer

A)  the Financial Accounting Foundation. 
B)  the Securities and Exchange Commission. 
C)  the FASB 
D)  the Accounting Principles Board 
A)  the Financial Accounting Foundation. 
B)  the Securities and Exchange Commission. 
C)  the FASB 
D)  the Accounting Principles Board

Question 13

Which of the following items is not a modifying convention?

Accepted Answer

A)  Matching 
B)  Materiality 
C)  Industry practices 
D)  Conservatism 
A)  Matching 
B)  Materiality 
C)  Industry practices 
D)  Conservatism

Question 14

Which of the following is NOT normally an objective of financial reporting?

Accepted Answer

A)  To provide information about an entity's assets and claims against those assets 
B)  To provide information that is useful in assessing an entity's sources and uses of cash 
C)  To provide information that is useful in lending and investing decisions 
D)  To provide information about an entity's liquidation value 
A)  To provide information about an entity's assets and claims against those assets 
B)  To provide information that is useful in assessing an entity's sources and uses of cash 
C)  To provide information that is useful in lending and investing decisions 
D)  To provide information about an entity's liquidation value

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 s. 
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 s.

Question 16

__________ accounting focuses on the development and communication of financial information for external users.

Accepted Answer

A)  management. 
B)  forensic 
C)  audit 
D)  financial 
A)  management. 
B)  forensic 
C)  audit 
D)  financial

Question 17

The area of accounting that emphasizes developing accounting information for use within a company is known as __________ accounting.

Accepted Answer

A)  management 
B)  forensic 
C)  audit 
D)  financial 
A)  management 
B)  forensic 
C)  audit 
D)  financial

Question 18

Which of the following measurement attributes is not currently used in practice?

Accepted Answer

A)  Present value 
B)  Net realizable value 
C)  Current replacement cost 
D)  Inflation-adjusted cost 
A)  Present value 
B)  Net realizable value 
C)  Current replacement cost 
D)  Inflation-adjusted cost

Question 19

What accounting concept justifies the use of accruals and deferrals?

Accepted Answer

A)  Going-concern assumption 
B)  Corporate form of organization 
C)  Consistency characteristic 
D)  Arm's-length transactions 
A)  Going-concern assumption 
B)  Corporate form of organization 
C)  Consistency characteristic 
D)  Arm's-length transactions

Exam 1: Financial Reporting

Operations of the FASB are overseen by the:

According to the FASB's conceptual framework,the process of reporting an item in the financial statements of an entity is

The normal order followed by the FASB in publishing its standards is

The financial statements that are prepared for the business are separate and distinct from the owners according to the

According to the FASB's conceptual framework,which of the following relates to both relevance and reliability? Consistency Verifiability

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

The International Accounting Standards Board was formed to

The assumed continuation of a business entity in the absence of evidence to the contrary is an example of the accounting concept of

The following are users of accounting information:

Large business enterprises employ financial accountants who are primarily concerned with__________ financial reporting.

Documents issued by the FASB include all of the following except

In 1973,the following private-sector body was organized to set accounting standards in the United States:

Which of the following items is not a modifying convention?

Which of the following is NOT normally an objective of financial reporting?

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

__________ accounting focuses on the development and communication of financial information for external users.

The area of accounting that emphasizes developing accounting information for use within a company is known as __________ accounting.

Which of the following measurement attributes is not currently used in practice?

What accounting concept justifies the use of accruals and deferrals?

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

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