Test Bank for Intermediate Accounting, 3rd Edition by Elizabeth A.
bb bb bb bb bb bb bb bb bb
Gordon
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✅
Intermediate Accounting, 3e (Gordon/Raedy/Sannella)
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All Chapters
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Chapter 1 The Financial Reporting Environment
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1.1 Overview of Financial Reporting bb bb bb
1) The financial reporting process generates three basic financial
bb bb bb bb bb bb bb
statements.Answer: FALSE
bb b bb
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
2) The demand for financial information is based on market participant
bb bb bb bb bb bb bb bb bb
demand.Answer: TRUE
bb b bb
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
3) Managers of economic entities are best considered to be users of financial
bb bb bb bb bb bb bb bb bb bb bb
information.Answer: FALSE
bb b bb
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
4) Managers of economic entities are best considered to be preparers of financial
bb bb bb bb bb bb bb bb bb bb bb
information.Answer: TRUE
bb b bb
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly
bb bb bb bb bb bb bb bb bb bb
tradedcompanies.
bb b
Answer: TRUE b b
Diff: bb2
Objective: bb1.1
bbIFRS/GAAP: b b GAAP
AACSB: b b Application bbof bbknowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded
bb bb bb bb bb bb bb bb bb bb bb
companies.Answer: FALSE
bb b bb
Diff: bb1
Objective: bb1.1
bbIFRS/GAAP: b b GAAP
1
,AACSB: b b Application bbof bbknowledge
2
,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting
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standards andoversees the audits of public companies in the United States.
bb bb b bb bb bb bb bb bb bb bb bb
Answer: FALSE
b b
Diff: bb1
Objective: bb1.1
bbIFRS/GAAP: b b GAAP
AACSB: b b Application bbof bbknowledge
8) Financial accounting standards influence the behavior of managers and other internal
bb bb bb bb bb bb bb bb bb bb
users.Answer: TRUE
bb b bb
Diff: bb2
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
9) Theories and procedures that evolve as a result of lobbying from various groups are
bb bb bb bb bb bb bb bb bb bb bb bb bb
examples ofproactive factors within the legal, economic, political, and social environment.
bb bb b bb bb bb bb bb bb bb bb bb
Answer: FALSE
b b
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
10) Financial information includes information that is not governed by rules set forth by the
bb bb bb bb bb bb bb bb bb bb bb bb bb
accountingstandard-setting bodies.
bb b bb
Answer: TRUE
b b
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
11) What is the term that describes the process of identifying, measuring, and communicating
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financialinformation about an economic entity to various user groups?
bb b bb bb bb bb bb bb bb bb
A) financial reportingbb
B) accounting standard setting bb bb
C) financial statementbb
D) financial
accountingAnswer:
bb b
bbD
Diff: bb2
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
3
, 12) Which element of financial accounting involves identifying the individuals who demand
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financialinformation?
bb b
A) financial information bb
B) economic entity bb
C) user groups
bb
D) legal, economic, political, and social
bb bb bb bb
environmentAnswer: C
bb b bb
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
13) Which of the following is not one of the four basic financial statements?
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A) balance sheet bb
B) trial balance
bb
C) cash flows statement
bb bb
D) statement of comprehensive bb bb
incomeAnswer: B
bb b bb
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
14) Which organization is responsible for promulgating U.S. GAAP?
bb bb bb bb bb bb bb
A) Financial Accounting Standards Board
bb bb bb
B) Public Company Accounting Oversight Board
bb bb bb bb
C) International Accounting Standards Board bb bb bb
D) Securities and Exchange bb bb
CommissionAnswer: A
bb b bb
Diff: bb1
Objective: bb bb bb1.1
bbIFRS/GAAP:
b b GAAP/IFRS
AACSB: b b Application bbof bbknowledge
15) Which organization is responsible for setting auditing standards and overseeing the audits
bb bb bb bb bb bb bb bb bb bb bb
of publiccompanies in the United States?
bb bb b bb bb bb bb
A) Financial Accounting Standards Board
bb bb bb
B) Public Company Accounting Oversight Board
bb bb bb bb
C) American Institute of Certified Public Accountants
bb bb bb bb bb
D) Securities and Exchange bb bb
CommissionAnswer: B
bb b bb
Diff: bb1
Objective: bb1.1
bbIFRS/GAAP: b b GAAP
AACSB: b b Application bbof bbknowledge
4
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