Test Bank for For Intermediate Accounting 3rd Edition by Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella All Chapters Fully Covered A+ Guide ISBN:9780136946694 Newest Version 2025

,Intermediate Accounting, 3e (Gordon/Raedy/Sannella)
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Chapter 1 The Financial Reporting Environment
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1.1 Overview of Financial Reporting +f +f +f




1) The financial reporting process generates three basic financial statements
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. Answer: FALSE
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Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

2) The demand for financial information is based on market participant deman
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d. Answer: TRUE
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Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

3) Managers of economic entities are best considered to be users of financial informatio
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n. Answer: FALSE
+f + f


Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

4) Managers of economic entities are best considered to be preparers of financial informatio
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n. Answer: TRUE
+f + f


Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly trade
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d companies.
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Answer: TRUE + f + f


Diff:+f2
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP
AACSB:+ f + f Application+fof+fknowledge

6) The FASB gives the SEC authority to regulate accounting for publicly traded companie
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s. Answer: FALSE
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Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP
AACSB:+ f + f Application+fof+fknowledge




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,7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards an
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d oversees the audits of public companies in the United States.
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Answer: FALSE + f + f


Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP
AACSB:+ f + f Application+fof+fknowledge

8) Financial accounting standards influence the behavior of managers and other internal user
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s. Answer: TRUE
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Diff:+f2
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

9) Theories and procedures that evolve as a result of lobbying from various groups are examples
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of proactive factors within the legal, economic, political, and social environment.
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Answer: FALSE + f + f


Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

10) Financial information includes information that is not governed by rules set forth by the accounti
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ng standard-setting bodies.
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Answer: TRUE + f + f


Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

11) What is the term that describes the process of identifying, measuring, and communicating financi
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al information about an economic entity to various user groups?
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A) financial reporting +f


B) accounting standard setting +f +f


C) financial statement +f


D) financial accounting +f


Answer: D
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Diff:+f2
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge




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, 12) Which element of financial accounting involves identifying the individuals who demand financi
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al information?
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A) financial information +f


B) economic entity +f


C) user groups
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D) legal, economic, political, and social environment
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Answer: C
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Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

13) Which of the following is not one of the four basic financial statements?
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A) balance sheet +f


B) trial balance
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C) cash flows statement
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D) statement of comprehensive income+f +f +f


Answer: B
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Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

14) Which organization is responsible for promulgating U.S. GAAP?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) International Accounting Standards Board +f +f +f


D) Securities and Exchange Commission
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Answer: A
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Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP/IFRS
AACSB:+ f + f Application+fof+fknowledge

15) Which organization is responsible for setting auditing standards and overseeing the audits of publ
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ic companies in the United States?
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A) Financial Accounting Standards Board
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B) Public Company Accounting Oversight Board
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C) American Institute of Certified Public Accountants
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D) Securities and Exchange Commission
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Answer: B
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Diff:+f1
Objective:+ f 1.1+fIFRS/GA
AP:+ f GAAP
AACSB:+ f + f Application+fof+fknowledge




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