Test Bank – Intermediate Accounting, 19th Edition by Donald E. Kieso, Weygandt & Warfield

TEST BANK




** All Chapters included
** True/False, MCQs
** Full Test Bank Answers

,Table of Contents are given below




1. The Environment and Conceptual Framework of Financial Reporting
2. Accounting Information System
3. Income Statement and Revenue Recognition
4. Balance Sheet and Statement of Cash Flows
5. Time Value of Money
6. Cash and Accounts Receivable
7. Valuation of Inventories: A Cost-Basis Approach
8. Inventories: Additional Valuation Issues
9. Acquisition and Disposition of Property, Plant, and Equipment
10. Depreciation, Impairments, and Depletion
11. Intangible Assets
12. Current Liabilities and Contingencies
13. Long-Term Liabilities
14. Stockholders' Equity
15. Dilutive Securities and Earnings per Share
16. Investments
17. Revenue Recognition
18. Accounting for Income Taxes
19. Pensions
20. Leases
21. Accounting Changes and Error Analysis
22. Statement of Cash Flows
23. Full Disclosure

,The test bank is organized in reverse order, with the last chapter displayed first, to ensure
that all chapters are included in this document. (Complete Chapters included Ch23-1)

CHAPTER 23
FULL DISCLOSURE IN FINANCIAL REPORTING
TRUE-FALSE
1. FASB standards directly affect financial statements, notes to the financial statements, and
management’s discussion and analysis.
Ans: F, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
Financial Statement Analysis, IFRS: None


2. The SEC requires companies to report certain substantive information that is not included in their
annual reports.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: Governance Perspective, AICPA AC: Reporting, AICPA PC: None, IMA:
Reporting & Control: Financial Statement Preparation, IFRS: None


3. Accounting policies are the specific accounting principles and methods a company uses and
considers most appropriate to present its financial statements fairly.
Ans: T, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
Financial Statement Preparation, IFRS: None

4. To adequately disclose related party transactions, companies should report these transactions'
legal form rather than the economic substance.
Ans: F, LO: 2, Bloom: K, Difficulty: Medium, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None


5. If a loss on an accounts receivable results from a customer’s bankruptcy after the balance sheet
date but before the issuance of the financial statements, the company only discloses this
information in the notes to the financial statements.
Ans: F, LO: 2, Bloom: C, Difficulty: Medium, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None

6. GAAP requires that general purpose financial statements include selected information on a single
basis of segmentation.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
Financial Statement Preparation, IFRS: None


7. The FASB requires allocating joint, common, or company-wide costs for external reporting.
Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
Financial Statement Preparation, IFRS: None


8. If 10 percent or more of a company’s revenue is derived from a single customer, the company
must disclose the total revenue from the customer by segment.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: Governance Perspective, AICPA AC: Reporting, AICPA PC: None, IMA:
Reporting & Control: Financial Statement Preparation, IFRS: None

, 23 - 2 Test Bank for Intermediate Accounting, Nineteenth Edition

9. Under the integral approach, companies should report accounting transactions as they occur, and
expense recognition should not change with the period covered.
Ans: F, LO: 2, Bloom: K, Difficulty: Medium, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting &
Control: Financial Statement Preparation, IFRS: None

10. Companies should generally use the same accounting principles for interim and annual reports.
Ans: T, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
Financial Statement Preparation, IFRS: None

11. Companies report income taxes in interim reports by prorating them over the four quarters.
Ans: F, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
Financial Statement Preparation, IFRS: None


12. To compute the year-to-date tax, companies apply the estimated annual effective tax rate to the
year-to-date ordinary income at the end of each interim period.
Ans: T, LO: 2, Bloom: K, Difficulty: Medium, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA
PC: None, IMA: Reporting & Control: Financial Statement Preparation, IFRS: None

13. In most situations, an auditor issues a qualified opinion or disclaims an opinion.
Ans: F, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
Financial Statement Preparation, IFRS: None

14. A qualified opinion is issued when the exception to the standard opinion is not of sufficient
magnitude to invalidate the statements as a whole.
Ans: T, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Reporting, AICPA PC: None, IMA: Reporting & Control:
Financial Statement Preparation, IFRS: None


15. The management discussion and analysis (MD&A) section presents aspects of an enterprise’s
liquidity, profitability, and solvency.
Ans: F, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: Governance Perspective, AICPA AC: Reporting, AICPA PC: None, IMA:
Reporting & Control: Financial Statement Preparation, IFRS: None

16. The MD&A section provides information about the effects of inflation and changing prices if they
are material to the financial statements.
Ans: T, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: Governance Perspective, AICPA AC: Reporting, AICPA PC: None, IMA:
Reporting & Control: Financial Statement Preparation, IFRS: None


17. A financial projection is a set of prospective financial statements that present a company’s
expected financial position and results of operations.
Ans: F, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA PC:
None, IMA: Reporting & Control: Financial Statement Analysis, IFRS: None


18. The difference between a financial forecast and a financial projection is that a forecast provides
information on what is expected to happen, while a projection provides information on what
might take place.
Ans: T, LO: 4, Bloom: K, Difficulty: Medium, Min: 1, AACSB: Knowledge, Communication, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA
PC: None, IMA: Reporting & Control: Financial Statement Analysis, IFRS: None