INTERMEDIATE ACCOUNTING WILEY 18TH EDITION
CH 1 EXAM
QUESTIONS AND ANSWERS
What does GAAP stand for? - ANSWER-Generally Accepted Accounting Principles
What does SEC stand for? - ANSWER-Securities and Exchange Commission
What does FASB stand for? - ANSWER-Financial Accounting Standards Board
How is the SEC involved in developing accounting standards? - ANSWER--It can reject
standards proposed by the private sector
-Prod the private sector to take quicker action in developing standards
-Communicate problems to FASB, respond to FASB exposure drafts, and give advice to FASB
What does FAF stand for? - ANSWER-Financial Accounting Foundation
What does FASAC stand for? - ANSWER-Financial Accounting Standards Advisory Council
How does the SEC regulate companies? - ANSWER-It assesses publicly traded companies'
financial statements and can issue a stop order if companies do not comply
What is a stop order? - ANSWER-An order by the SEC that prevents a company from issuing or
trading securities
What does the FAF do? - ANSWER-Selects members of the FASB and its advisory councils and
exercises general oversight
What does FASB do? - ANSWER-Sets accounting standards in the U.S.
What does the FASAC do? - ANSWER-It consults on major policy issues, technical issues,
project priorities, and selection and organization of task forces.
What is the FASB due process system? - ANSWER-1. Topics are identified
2. Research and analysis are conducted (preliminary views)
3. There is a public hearing on the proposed standard
4. Exposure draft is created
5. Accounting standards are updated.
What does AICPA stand for? - ANSWER-American Institute of Certified Public Accountants
What does IASB stand for? - ANSWER-International Accounting Standards Board (Similar to
FASB but on an international level)
CH 1 EXAM
QUESTIONS AND ANSWERS
What does GAAP stand for? - ANSWER-Generally Accepted Accounting Principles
What does SEC stand for? - ANSWER-Securities and Exchange Commission
What does FASB stand for? - ANSWER-Financial Accounting Standards Board
How is the SEC involved in developing accounting standards? - ANSWER--It can reject
standards proposed by the private sector
-Prod the private sector to take quicker action in developing standards
-Communicate problems to FASB, respond to FASB exposure drafts, and give advice to FASB
What does FAF stand for? - ANSWER-Financial Accounting Foundation
What does FASAC stand for? - ANSWER-Financial Accounting Standards Advisory Council
How does the SEC regulate companies? - ANSWER-It assesses publicly traded companies'
financial statements and can issue a stop order if companies do not comply
What is a stop order? - ANSWER-An order by the SEC that prevents a company from issuing or
trading securities
What does the FAF do? - ANSWER-Selects members of the FASB and its advisory councils and
exercises general oversight
What does FASB do? - ANSWER-Sets accounting standards in the U.S.
What does the FASAC do? - ANSWER-It consults on major policy issues, technical issues,
project priorities, and selection and organization of task forces.
What is the FASB due process system? - ANSWER-1. Topics are identified
2. Research and analysis are conducted (preliminary views)
3. There is a public hearing on the proposed standard
4. Exposure draft is created
5. Accounting standards are updated.
What does AICPA stand for? - ANSWER-American Institute of Certified Public Accountants
What does IASB stand for? - ANSWER-International Accounting Standards Board (Similar to
FASB but on an international level)
