INTERMEDIATE ACCOUNTING FINAL
EXAM QUESTIONS WITH CORRECT
SOLUTIONS||100% GUARANTEED
PASS||UPDATED 2026/2027
SYLLABUS||<<RECENT VERSION>>
Income Statement - ANSWER ✓ measures the success of company operations for
a given period of time. It provides investors and creditors with information that
helps them predict the amounts, timing, and uncertainty of future cash flows
Sales Revenue:
Less: Sales Discounts
Sales ret. and allow
Net Sales
Cost of Goods Sold
Gross Profit - ANSWER ✓ Income Statement
(Revenue Accounts order)Basic Premises of the FASB - ANSWER ✓ 1.
responsive to the needs and viewpoints of the entire economic community, not just
the public accounting profession
2. operate in full view of the public through a due process system
Due Process System of the FASB - ANSWER ✓ 1. Topics identified and placed
on Board's agenda
2. Research and analysis conducted and preliminary views of pros and cons issued
3. Public hearing on proposed standard
4. Board evaluates research and public response and issues exposure draft
5. Board evaluates responses and changes exposure draft, if necessary. Final
standard issued.
Pronouncements of the FASB - ANSWER ✓ 1. Accounting Standards Updates
2. Financial Accounting Concepts
, Accounting Standards Updates - ANSWER ✓ 1. These Updates amend the
Accounting Standards Codification, which represents the source of authoritative
accounting standards, other than standards issued by the SEC.
2. Emerging Issues Task Force (EITF) - reach a consensus on how to account for
new and unusual financial transactions that may potentially create differing
financial reporting practices.
Financial Accounting Concepts - ANSWER ✓ A series of pronouncements issued
by the FASB with the purpose of setting forth fundamental objectives and concepts
that the FASB will use in developing future standards of financial accounting and
reporting. Not GAAP
Setting Accounting Standards - ANSWER ✓ 1. Financial Accounting Foundation
(FAF) - select members of the FASB and GASB and their Advisory Councils, fund
their activities and exercise general oversight.
2. FASB - establish and improve standards of financial accounting and reporting
for the guidance and education of the public
3. Financial Accounting Standards Advisory Council (FASAC) - consult on major
policy issues, technical issues, project priorities, and selection and organization of
task forces
Financial Accounting Standards Board Accounting Standards Codification -
ANSWER ✓ 1. Provides one place with all the authoritative literature related to a
particular topic.
2. Determines GAAP, does not create new GAAP
3. All accounting literature here is authoritative, other accounting literature is not.
*also called the Codification
Financial Accounting Standards Board Codification Research System (CRS) -
ANSWER ✓ online, real-time database that provides easy access to the
Codification
GAAP in a Political Environment - ANSWER ✓ GAAP is as much a product of
political action as it is of careful logic or empirical findings
Sarbanes-Oxley Act - ANSWER ✓ Key Provisions:
1. Oversight board, Public Comapny Accounting Oversight Board (PCAOB) for
accounting practices
2. Stronger independence rules for auditors
,3. Requires CEOs and CFOs to certify that financial statements and disclousres are
accurate and complete
4. Audit committees comprised of independent members with finanical expertise
5. Codes of ethics for senior finanical officers
6. Effective internal controls over financial reporting (public companies)
Expectations Gap - ANSWER ✓ what the public thinks accountants should do
and what accountants think they can do
Challenges Facing Financial Reporting - ANSWER ✓ 1. Nonfinancial
Measurements
2. Forward-looking Information
3. Soft Assets (intangibles)
4. Timeliness
5. Understandability
International Financial Reporting Standards (IFRS) - ANSWER ✓ Issued by
Lodon-based International Accounting Standards Board (IASB)
All European Union companies use IFRS
Norwalk Agreement - ANSWER ✓ The IASB and FASB pledged to:
1. Make their existing financial reporting standards fully compatible as soon as
practicable
2. to coordinate their future work programs to ensure that, once achieved,
compatibility is maintained
Conceptual Framework - ANSWER ✓ Establishes the concepts that underlie
financial reporting:
1. purpose
2. boundaries
3. selecting transactions, other events, and circumstances to be represented
4. how these should be recognied and measured
5. how these should be summarized and reported
Need for a Conceptual Framework - ANSWER ✓ 1. to develop a coherent set of
standards and rules (useful and consistent pronouncements over time from the
FASB)
2. to solve new and emerging practical problems
, Development of a Conceptual Framework - ANSWER ✓ In 1976, the FASB
began to develop a conceptual framework that would be a basis for setting
accounting rules and for resolving financial reporting controversies.
- The FASB has since issued seven Statements of Financial Accounting Concepts
that relate to financial reporting for business enterprises.
Statements of Financial Accounting Concepts (SFAC) - ANSWER ✓ SFAC are
NOT GAAP
1. Goals and purposes of accounting
2. characteristics that make accounting informatin useful
3. definitions of items in financial statements
5. recognition and measurement criteria and guidance on what infomration should
be fomrally incorporated into financial statements and when
6. Replaces #3, and expands its scope to include not-for-profit organizations
7. using expected future cash flows and present values as a basis of measurement
8. Replaces #1 and #2 (joint framework from FASB and IASB)
Framework for Financial Reporting - ANSWER ✓ First Level - objective of
financial reporting
Second Level - qualitative characteristics of accounting information and elements
of financial statements
Third Level - Recognition, Measurement, and Disclosure Concepts (Assumptions,
Principles, and Constraint)
First Level: Objective of Financial Reporting - ANSWER ✓ 1. The foundation of
the conceptual framework
2. Provide financial information about the reporting entity that is useful to present
and potential equity investors, lenders, and other creditors in making decisions
about providing resources to the entity.
Second Level: Fundamental Concepts - ANSWER ✓ provides conceptual
building blocks that explain the qualitative characteristics of accounting
information and define the elements of financial statements
Bridge between the why of accounting (the objective) and the how of accounting
(recognition, measurement, and financial statement presentation)
Fundamental Quality - Relevance - ANSWER ✓ Capable of making a difference
in a decision:
EXAM QUESTIONS WITH CORRECT
SOLUTIONS||100% GUARANTEED
PASS||UPDATED 2026/2027
SYLLABUS||<<RECENT VERSION>>
Income Statement - ANSWER ✓ measures the success of company operations for
a given period of time. It provides investors and creditors with information that
helps them predict the amounts, timing, and uncertainty of future cash flows
Sales Revenue:
Less: Sales Discounts
Sales ret. and allow
Net Sales
Cost of Goods Sold
Gross Profit - ANSWER ✓ Income Statement
(Revenue Accounts order)Basic Premises of the FASB - ANSWER ✓ 1.
responsive to the needs and viewpoints of the entire economic community, not just
the public accounting profession
2. operate in full view of the public through a due process system
Due Process System of the FASB - ANSWER ✓ 1. Topics identified and placed
on Board's agenda
2. Research and analysis conducted and preliminary views of pros and cons issued
3. Public hearing on proposed standard
4. Board evaluates research and public response and issues exposure draft
5. Board evaluates responses and changes exposure draft, if necessary. Final
standard issued.
Pronouncements of the FASB - ANSWER ✓ 1. Accounting Standards Updates
2. Financial Accounting Concepts
, Accounting Standards Updates - ANSWER ✓ 1. These Updates amend the
Accounting Standards Codification, which represents the source of authoritative
accounting standards, other than standards issued by the SEC.
2. Emerging Issues Task Force (EITF) - reach a consensus on how to account for
new and unusual financial transactions that may potentially create differing
financial reporting practices.
Financial Accounting Concepts - ANSWER ✓ A series of pronouncements issued
by the FASB with the purpose of setting forth fundamental objectives and concepts
that the FASB will use in developing future standards of financial accounting and
reporting. Not GAAP
Setting Accounting Standards - ANSWER ✓ 1. Financial Accounting Foundation
(FAF) - select members of the FASB and GASB and their Advisory Councils, fund
their activities and exercise general oversight.
2. FASB - establish and improve standards of financial accounting and reporting
for the guidance and education of the public
3. Financial Accounting Standards Advisory Council (FASAC) - consult on major
policy issues, technical issues, project priorities, and selection and organization of
task forces
Financial Accounting Standards Board Accounting Standards Codification -
ANSWER ✓ 1. Provides one place with all the authoritative literature related to a
particular topic.
2. Determines GAAP, does not create new GAAP
3. All accounting literature here is authoritative, other accounting literature is not.
*also called the Codification
Financial Accounting Standards Board Codification Research System (CRS) -
ANSWER ✓ online, real-time database that provides easy access to the
Codification
GAAP in a Political Environment - ANSWER ✓ GAAP is as much a product of
political action as it is of careful logic or empirical findings
Sarbanes-Oxley Act - ANSWER ✓ Key Provisions:
1. Oversight board, Public Comapny Accounting Oversight Board (PCAOB) for
accounting practices
2. Stronger independence rules for auditors
,3. Requires CEOs and CFOs to certify that financial statements and disclousres are
accurate and complete
4. Audit committees comprised of independent members with finanical expertise
5. Codes of ethics for senior finanical officers
6. Effective internal controls over financial reporting (public companies)
Expectations Gap - ANSWER ✓ what the public thinks accountants should do
and what accountants think they can do
Challenges Facing Financial Reporting - ANSWER ✓ 1. Nonfinancial
Measurements
2. Forward-looking Information
3. Soft Assets (intangibles)
4. Timeliness
5. Understandability
International Financial Reporting Standards (IFRS) - ANSWER ✓ Issued by
Lodon-based International Accounting Standards Board (IASB)
All European Union companies use IFRS
Norwalk Agreement - ANSWER ✓ The IASB and FASB pledged to:
1. Make their existing financial reporting standards fully compatible as soon as
practicable
2. to coordinate their future work programs to ensure that, once achieved,
compatibility is maintained
Conceptual Framework - ANSWER ✓ Establishes the concepts that underlie
financial reporting:
1. purpose
2. boundaries
3. selecting transactions, other events, and circumstances to be represented
4. how these should be recognied and measured
5. how these should be summarized and reported
Need for a Conceptual Framework - ANSWER ✓ 1. to develop a coherent set of
standards and rules (useful and consistent pronouncements over time from the
FASB)
2. to solve new and emerging practical problems
, Development of a Conceptual Framework - ANSWER ✓ In 1976, the FASB
began to develop a conceptual framework that would be a basis for setting
accounting rules and for resolving financial reporting controversies.
- The FASB has since issued seven Statements of Financial Accounting Concepts
that relate to financial reporting for business enterprises.
Statements of Financial Accounting Concepts (SFAC) - ANSWER ✓ SFAC are
NOT GAAP
1. Goals and purposes of accounting
2. characteristics that make accounting informatin useful
3. definitions of items in financial statements
5. recognition and measurement criteria and guidance on what infomration should
be fomrally incorporated into financial statements and when
6. Replaces #3, and expands its scope to include not-for-profit organizations
7. using expected future cash flows and present values as a basis of measurement
8. Replaces #1 and #2 (joint framework from FASB and IASB)
Framework for Financial Reporting - ANSWER ✓ First Level - objective of
financial reporting
Second Level - qualitative characteristics of accounting information and elements
of financial statements
Third Level - Recognition, Measurement, and Disclosure Concepts (Assumptions,
Principles, and Constraint)
First Level: Objective of Financial Reporting - ANSWER ✓ 1. The foundation of
the conceptual framework
2. Provide financial information about the reporting entity that is useful to present
and potential equity investors, lenders, and other creditors in making decisions
about providing resources to the entity.
Second Level: Fundamental Concepts - ANSWER ✓ provides conceptual
building blocks that explain the qualitative characteristics of accounting
information and define the elements of financial statements
Bridge between the why of accounting (the objective) and the how of accounting
(recognition, measurement, and financial statement presentation)
Fundamental Quality - Relevance - ANSWER ✓ Capable of making a difference
in a decision:
